German government welcomes new Cyprus bailout deal

The German government is pleased with the new bailout deal agreed on Monday, a government spokesman said, adding that the agreement is in the interests of Cyprus and Europe as a whole."The agreement reached now is in the interests of Cyprus, it is in the interests of Europe and the euro zone," said government spokesman Steffen Seibert.He said German Chancellor Angela Merkel as well as the entire federal government were pleased with the agreement reached in Brussels, adding that the chancellor considers the new rescue package to be viable and appropriate.The agreement, clinched by President Nicos Anastasiades in high-level talks in Brussels and endorsed by the Eurogroup in the early hours of Monday, came hours before a deadline to avert a collapse of the island's banking system.According to the deal, the Cyprus Popular (Laiki) Bank will be split into a good bank and a bad bank. The bad bank will be run down over time, while the good bank will be folded into Bank of Cyprus.The deal came after days of uncertainties after the Cypriot parliament rejected a former bailout deal struck on March 16, under which depositors in Cypriot banks would be subject to a one-off tax on their savings.Seibert said Cyprus needed "a smaller, healthier, sustainably managed banking sector," adding that the Cypriot government had a significant responsibility to explain to its people why this path is difficult but right.He said that the restructuring measures would bring hardships, but they would contribute to the recovery of the Cypriot economy.The example of Cyprus hasd clearly shown that Europe is in solidarity and ready to help troubled countries when decisions on reforms are made, he added.