European Leaders in Lapland Signal Confidence in Cyprus Talks

European leaders meeting in Finnish Lapland this weekend expressed confidence that a financial collapse in Cyprus can be averted, saying Europe has proved its ability to deal with crises.

“It’s necessary to reach an agreement and I’m sure that the finance ministers will find a solution,” Finnish Prime Minister Jyrki Katainen told reporters in Saariselkae. “We have learned to deal with sovereign crises.”

Euro-area finance ministers will meet today to decide whether Cyprus has done enough for a 10 billion-euro ($13 billion) bailout. The third-smallest economy in the 17-nation euro region was plunged into chaos last week when its lawmakers rejected a proposal to impose levies on all bank deposits in order to qualify for the bailout funds. A levy on deposits over 100,000 euros is now being examined.

“There will probably be some turbulence in Europe in the financial markets, but we wouldn’t expect any major long-term implications,” Latvia’s Prime Minister Valdis Dombrovskis said.

Still, Turkey’s Deputy Prime Minister, Ali Babacan, said the Cyprus bailout “should not set a precedent.”

“We would never like to see the same methodology used in other countries, in the euro zone or outside of it,” he said.

Leaders including Danish Prime Minister Helle Thorning-Schmidt and Croatian Prime Minister Zoran Milanovic attended the meeting, hosted by Katainen and Finland’s Europe Minister Alexander Stubb. Topics included the European Union’s fundamental values, economic issues, defense pacts, trade agreements and structural reforms to boost confidence in the region, according to Katainen.

The attendance list narrowed just days before the meeting started as the situation in Cyprus worsened. Last-minute cancellations included Joerg Asmussen, a member of the European Central Bank’s executive board, Greece’s Prime Minister Antonis Samaras and Dutch Prime Minister Mark Rutte.

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