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CYPRUS AGREES BAILOUT DEAL WITH INTERNATIONAL CREDITORS
November 23, 2012 - 16:14 AMT
PanARMENIAN.Net - Cyprus has agreed a bailout deal with international
creditors, becoming the fifth eurozone member to do so, BBC News
reported.
The country made the request to its European partners and the
International Monetary Fund in June, for help to revive its banks.
Lenders have suffered huge losses due to their heavy exposure to the
Greek economy and financial system. The deal, expected to include 16bn
euros ($20bn) of loans, will be officially confirmed later on Friday,
Nov 23.
But any deal would have to be ratified by parliaments in the eurozone
countries.
Banks have lost large amounts on Greek government bonds. They are
also facing big losses on loans made to businesses in Cyprus, which
have been hard hit by the deep recession in neighboring Greece,
its biggest trading partner.
Banks derive about 40% of their revenue from Greece. Initial estimates
had put the cost of their refinancing at about 10bn euros, or 55%
of gross domestic product.
In June the country's two largest lenders the Bank of Cyprus and Cyprus
Popular Bank had asked for more than 2bn euros in government aid.
The Cypriot government has been holding negotiations for a possible
loan from a country outside the EU, such as Russia or China.
The country has already borrowed 2.5bn euros from Russia, whose
business people are important customers of Cyprus's relatively large
offshore financial sector which offers low tax rates. Cyprus's stock
exchange was up 8.5% after the announcement.
Cyprus is the fifth country in the 17-member euro area to seek a
bailout. The others are: Greece, Ireland, Portugal, and Spain.
November 23, 2012 - 16:14 AMT
PanARMENIAN.Net - Cyprus has agreed a bailout deal with international
creditors, becoming the fifth eurozone member to do so, BBC News
reported.
The country made the request to its European partners and the
International Monetary Fund in June, for help to revive its banks.
Lenders have suffered huge losses due to their heavy exposure to the
Greek economy and financial system. The deal, expected to include 16bn
euros ($20bn) of loans, will be officially confirmed later on Friday,
Nov 23.
But any deal would have to be ratified by parliaments in the eurozone
countries.
Banks have lost large amounts on Greek government bonds. They are
also facing big losses on loans made to businesses in Cyprus, which
have been hard hit by the deep recession in neighboring Greece,
its biggest trading partner.
Banks derive about 40% of their revenue from Greece. Initial estimates
had put the cost of their refinancing at about 10bn euros, or 55%
of gross domestic product.
In June the country's two largest lenders the Bank of Cyprus and Cyprus
Popular Bank had asked for more than 2bn euros in government aid.
The Cypriot government has been holding negotiations for a possible
loan from a country outside the EU, such as Russia or China.
The country has already borrowed 2.5bn euros from Russia, whose
business people are important customers of Cyprus's relatively large
offshore financial sector which offers low tax rates. Cyprus's stock
exchange was up 8.5% after the announcement.
Cyprus is the fifth country in the 17-member euro area to seek a
bailout. The others are: Greece, Ireland, Portugal, and Spain.