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Cyprus vehemently rejects these accusations, pointing out that all European legislation on banking and business regulations have been enshrined in Cypriot law, too. On Tuesday, Panicos Demetriades, governor of the Central Bank of Cyprus, insisted in an op-ed in the Financial Times that his country has more measures against money laundering in place than other eurozone nations.
“This is undoubtedly true,” says Hubert Faustmann, a German teaching history and international relations at Intercollege in Nicosia. “What is less certain is that these rules are actually enforced.”
It is a doubt shared by European leaders. A meeting of eurozone finance ministers earlier this week postponed any decisions about a Cypriot bailout until March.
In the meantime, general elections in Cyprus on Feb. 17th could bring a change of government, with polls suggesting that the Communist AKEL party might have to hand over the presidency to the center-right Democratic Rally party. Its leader, Nicos Anastasiades, would then have to negotiate the bailout conditions.
That's if there is a bailout. Rescue rules require there to be “a danger for the stability of the eurozone as a whole,” German Finance Minister Wolfgang Schaeuble told reporters earlier this week in Brussels before meeting his colleagues. “This has to be met. We will see.”