RSS Feed
April 13th, 2013 
Peter Nolan
Updated
Cyprus is one step closer to a multi-billion-euro rescue package designed the save the debt-ridden country from bankruptcy.
Eurozone finance ministers meeting in Dublin have agreed on a loan worth $12.5 billion from the European Union and the International Monetary Fund (IMF).
As part of the rescue package, Cyprus will have to come up with another $16 billion.
The country is downsizing its banking sector, raising taxes, reducing the public sector workforce and privatising state-owned utilities to raise the money.
It is now up to EU member states and the IMF to give their final stamp of approval to the deal, but the first funds could be released by the middle of next month.
At the Dublin meeting, Cyprus indicated its debt crisis was worse than originally thought, but said it was not asking for more bailout money.
Instead it has appealed for assistance from the EU’s structural funds.
Cypriot presidential spokesman Christos Stylianides said the new deal did not mean savers would again be hit by a “haircut” on deposits.
He said it “in no way indicates that a de facto new recapitalisation will be imposed on banks or any extra charges to depositors”.
Banks closed for a fortnight last month after the government announced a cut to bank deposits over $125,000.
Portugal and Ireland
EU finance ministers have also approved extensions to the bailout loans for Portugal and Ireland at the Dublin meeting.
The ministers agreed to reward the two countries for making economic progress by being given more time to repay their debts after being bailed out.
The two nations won an extra seven years to repay the aid they received to save them from collapse.
But there must be pending legal guarantees from the Portuguese government that it will meet deficit targets in the future.
More talks will centre on moves to clamp down on tax fraud across the EU that have isolated Austria.
ABC/AFP
Topics:
international-financial-institutions,
money-and-monetary-policy,
budget,
cyprus,
european-union,
portugal,
ireland
First posted
Source Article from http://www.abc.net.au/news/2013-04-13/cyprus-bailout-deal-approved-by-eu/4627026
Views: 0
Posted in 
