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Cyprus will oppose forcing losses on uninsured depositors to rescue the country’s banking system.

Cypriot finance minister Vassos Shiarly responded to a report in Monday’s Financial Times by saying:
“We do not accept, nor are we discussing, nor can we ever accept this. We categorically state that such a move would be illegal under Cypriot law and, I believe under European law.”

Euronews’ Efi Koutsokosta said any final decisions on Cyprus would be taken in March — the country is holding presidential elections on Sunday.

“Also on the agenda are Germany’s calls for Cyprus to be more transparent on the issue of money laundering,” our correspondent in Brussels said.

Wealthly Russians have channelled funds into Cypriot banks, making any possible aid deal a hard sell to already sceptical German voters.

Eurogroup chief and Dutch Finance Minister Jeroen Dijsselbloem said: “I think we all agreed that a solution has to be reached on Cyprus and I think we should use the time that we have in view of the elections this month to work out the best possible solution. I’m sure that German government will agree on that”.

But the European Commission denied Brussels had proposed forcing losses depositors and investors, saying it wanted to “ensure fair burden sharing’ in any Cypriot rescue deal.

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