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March 16, 2013 at 2:39 PM   |   Comments

EU bailout terms spark bank run in Cyprus

BRUSSELS, March 16 (UPI) -- Cypriot officials reported a run on banks after the European Union said a $13 billion bailout deal for Cyprus would require an unprecedented tax on deposits.

The deal includes an agreement for Cyprus to raise taxes, cut its deficit and reduce its dependence on the banking sector, the BBC reported Saturday.

"The Euro Group was able to reach a political agreement with the Cypriot authorities on the cornerstones of this agreement," said Jeroen Dijsselbloem, the head of the Euro Group. "The assistance is warranted to safeguard financial stability in Cyprus and the eurozone as a whole."

"We don't want a Band-Aid. We want something that lasts, that is durable and sustainable," said International Monetary Fund Director Christine Lagarde, who participated in negotiations on the bailout.

Bank depositors are expected to contribute $7.5 billion to the package through a one-time 6.75 percent tax levied on bank accounts of less than $130,800 and a 9.9 percent tax on accounts worth more than that.

The taxes are already being collected to safeguard against massive withdrawals of funds from the country, officials said.

The Qatari-owned news network al-Jazeera reported Saturday people lined up at ATMs to try to get their money out of banks.

Government spokesman Christos Stylianides said the situation was "is serious but not tragic, there is no reason to panic."

He said the government had to choose "between saving the economy and a disorderly default."

"There is a general political sentiment that it is not acceptable to be bailing out a country, and thereby putting European taxpayers' money at risk, to basically protect Russian depositors in Cypriot banks," said economist Jacob Funk Kirkegaard at the Peterson Institute for International Economics.

There has been speculation Russia could help finance the bailout by granting a $2.5 billion loan to Cyprus. Cypriot Finance Minister Michael Sarris is scheduled to visit Moscow Monday, the BBC said.


Internet use grows in Russia

MOSCOW, March 16 (UPI) -- The number of people in Russia using the Internet every day jumped in Russia during the course of the winter, the state-run Public Opinion Foundation said.

A study published in December found 46.8 million people in Russia surfed the Web every day. Using figures taken from 20 weekly surveys that included 30,000 respondents, the Public Opinion Foundation said that number has now climbed to 50.1 million, a 13 percent increase, RIA Novosti reported Saturday.

The organization calculated the number of daily Internet users in Russia was 3 million in 2003.

The current figures mean 43 percent of all Russians use the Internet daily. Prime Minister Dmitry Medvedev in 2010 set the goal of having 90 percent of Russians use the Internet daily within the "next several years."

Russia is still far behind Australia, where 89 percent of the people use the Internet daily. Eighty percent go online daily in Japan and 78 percent are daily users in the United States, RIA Novosti said.


A-B InBev, Grupo Modelo, ask for more time

ST. LOUIS, March 16 (UPI) -- Two major brewing companies told a U.S. court they need more time to work out merger terms that would resolve Department of Justice antitrust concerns.

International beer-making giant Anheuser-Busch InBev and Mexican brewer Grupo Modelo said they had made "substantial progress" in carving out an agreement that would resolve the Justice Department's complaint that a merger between the two would do customers a disservice, the St. Louis Business Journal reported Saturday.

A-B InBev and Grupo Modelo agreed in June to a $20.1 billion deal that would give A-B InBev the half of the Mexican company that it did not already own, the newspaper said.

The Justice Department said the deal "would substantially lessen competition in the market for beer in the United States," and filed a lawsuit in January to block the merger.

The companies said in February they had agreed to modify the deal by allowing Constellation Brands to step in and buy a Grupo Modelo brewery and to own the rights for Corona and Modelo beer brands.

The companies are working on revisions to that $2.9 billion deal, the Business Journal said.

The companies say they will have a deal ready to present to the court by April 9. The court proceedings had already been pushed back to March 19.


Warren Buffett salary still $100,000

NEW YORK, March 16 (UPI) -- Multibillionaire U.S. investor Warren Buffett was paid $100,000 in 2012 for his work at his holding company, Berkshire Hathaway Inc., a proxy filing said.

Buffett, who purchased the failing textile mill Berkshire Hathaway four decades ago and turned it into an expansive investment conglomerate that, among other investments, runs a railroad and owns Dairy Queen stores and paint company Benjamin Moore, did not ask for a raise this year, the proxy filing said.

Buffett, the chairman and chief executive officer of Berkshire Hathaway and the fourth from the top on Forbes Magazine's list of the richest people in the world, did not "expect or desire," a raise this year, the company said.

He even paid Berkshire Hathaway $50,000 out of his own pocket last year for personal expenses such as stamps and other office items, The Wall Street Journal reported Saturday.

The bulk of Buffett's personal fortune comes from his personal investment portfolio, the Journal said. His salary at Berkshire Hathaway has not changed in decades.

Buffett is currently worth $53.5 billion, Forbes estimates.

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