German parliament approves Cyprus rescue package

Germany's lower house of parliament approved a 10-billion-euro (13 billion U.S. dollars) aid package for Cyprus on Thursday with an overwhelming majority.

The bailout was approved by 487 votes to 102, while 13 lawmakers abstained.

Finance Minister Wolfgang Schaeuble opened the session in the Bundestag, telling lawmakers that it was right for Europe to bail out Cyprus, as the Cypriot government would have defaulted on its loans without help, posing a "significant risk" of contagion through the eurozone and beyond.

He added that the current approach of fiscal consolidation and structural reforms is the only sustainable course to repair the eurozone, while the plan is "beginning to bear fruit" as the situation in the eurozone has improved in 2013 and the euro crisis is causing less uncertainty in the financial markets.

The terms of the Cyprus debt rescue was formally approved by eurozone finance ministers last Friday, and the first tranche of the loan will arrive in May.

The Eurogroup finance ministers meeting in Dublin approved a bailout memorandum based on an assessment by the European Commission, under which the European union   will provide 9 billion euros, the International Monetary Fund 1 billion euros and Cyprus 13 billion euros.

The Eurogroup ministerial meeting set an April 24 deadline for the loan memorandum of 10 billion euros to be endorsed by all members states, including seven which have to secure a parliamentary approval.

The bailout plan for Cyprus requires winding down the country's second largest bank and levying a tax on bank deposits over 100,000 euros. (1 euro = 1.31 U.S. dollars)

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