Ali Babacan warns EU against taxing deposits

Deputy Prime Minister Ali Babacan said, "the method of taxing the deposits at the banks as a solution for the economic crisis in the Greek Cypriot administration was principally wrong." Babacan, who participated at a conference about the future of Europe in Saariselka, Finland commented to Anadolu Agency on the crisis in the south of Cyprus. "Our observations, the problems we see and solutions we propose on EU are appreciated, valued. Because the current situation of the Turkish economy is very, very well. Turkey has political and economic stability. But the EU has not been able to achieve that" said Babacan. Babacan also said "the economic crisis comes and goes. Hence the crisis should not be the reason for the breakup of political union." Babacan added, "the method which is used to solve the problem is not the one which we approved of." 

Babacan criticized the banking system in Greek Cypriot administration, saying "they took deposits that they should never have for which they paid an interest rate higher than the market levels. In the end they fell in the trap of "Ponzi Game" which means they had to pay off debts with even higher interests."

Deputy Prime Minister Ali Babacan underlined the method which was used in the Greek Cypriot administration might have been the only way to get out of the crisis but was principally not right so shouldn't be used in another country."