UK

Cyprus Bailout: Britain's MEPs Attack Controversial Raid On Savings Accounts

18/03/2013 14:10 GMT | Updated 18/03/2013 15:28 GMT

Britain's Euro MPs have given a resounding thumbs down to the raid on saving accounts agreed by Cyprus.

There were warnings the controversial move could set a precedent across Europe, as Irish politicians said "a Rubicon has been crossed" with savers targeted for the first time.

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There has been a furious reaction in Cyprus

MEPs from all of the main parties were fiercely critical of the £8.6 billion package that includes a compulsory levy of up to 10% on people's bank accounts.

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Queues formed at cash points

But there appears to be little they can do - despite the knock-on effects on Britons - because the deal was a national decision by the Cypriot government.

Peter Skinner, Labour MEP for the South East, told The Huffington Post UK: "It seems inconsistent, and could be dangerous as a precedent.

"What about other, non-eurozone savers? We need answers before this becomes a chaotic moment in the EU's history."

He said the European Parliament would demand questions of the ministers who agreed the deal.

Tory MEP and arch-eurosceptic Daniel Hannan said "the people who did the right thing" were being penalised.

Writing in the Daily Mail, he added: "Now we see the truth. The dream of political union matters more to Europe’s governing caste than the well-being of the people they represent. Shame on them."

Chris Davies, Liberal Democrat Euro MP for the North West, said the decision could "open a can of worms".

His Lib Dem colleague, Sharon Bowles MEP, who chairs the European Parliament's Economic and Monetary Affairs Committee, said the bailout was a "disaster" for the EU.

Ukip leader and South East MEP Nigel Farage said the deal amounted to "theft, pure and simple".

He added: "The Cypriot government have the choice of asking the people if they want to pay or want to leave the single currency."

The unprecedented raid has sent shockwaves across Europe, with fears it could be repeated in other countries that have fallen into difficulty.

Michael McGrath, of the Irish Fianna Fail party. said: "Irish depositors will legitimately ask how safe their money is if it transpires that Irish banks need more money to absorb losses on mortgages and business loans.

"The reality is a Rubicon has been crossed in the Cypriot deal which could have consequences in other euro zone countries."