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COST OF BAILING OUT CYPRUS SWELLS TO 23BN EUROS
April 11, 2013 - 19:42 AMT
PanARMENIAN.Net - The cost of bailing out Cyprus has swollen to
euro 23 billion ($30 billion), with the crisis-hit country having to
take on the lion's share of the measures needed to avoid bankruptcy,
according to a draft document by the country's international creditors.
The draft document, obtained by The Associated Press Thursday, April
11, says the country will have to find 13 billion euros ($17 billion)
- an increase on the 7 billion euro contribution agreed during the
country's chaotic bailout talks last month. The money will be raised by
imposing heavy losses on large bank deposits, levying additional taxes,
privatizations and a part-sale of the central bank's gold reserves.
The so-called troika of international creditors - the European
Commission, the European Central Bank and the International Monetary
Fund - are set to grant the Mediterranean island nation a 10 billion
euros ($13 billion) rescue loan package to recapitalize Cyprus's
shaky banking system and keep the government afloat.
As part of the original deal, Cyprus agreed to overhaul its bloated
banking industry by breaking up its second-largest bank, Laiki,
and imposing losses on savers who have more than 100,000 euros in
another lender, the Bank of Cyprus.
In the latest draft document, the troika has revised the cost of
bailing out Cyprus amid a gloomier economic outlook, adding an extra
6 billion euros to the bill.
The document also shows that the troika expects the break-up of Laiki
to raise 10.6 billion euros. Those funds will be used to prop up the
Bank of Cyprus, the AP says.
Cyprus will also have to sell off parts of its gold reserves - a
measure that is expected to net another 400 million euros - a first
for a bailed-out European country.
The measures in the draft document highlight how Europe's financially
more stable creditor countries are becoming increasingly impatient
with bailing out their southern neighbors and are inflicting harsher
terms on countries in need of assistance. Cyprus is the fifth eurozone
country to receive bailout loans.
The eurozone's 17 finance ministers are gathering Friday at a meeting
in Dublin where, they are expected to discuss the documents spelling
out the details of the assistance package for Cyprus.
April 11, 2013 - 19:42 AMT
PanARMENIAN.Net - The cost of bailing out Cyprus has swollen to
euro 23 billion ($30 billion), with the crisis-hit country having to
take on the lion's share of the measures needed to avoid bankruptcy,
according to a draft document by the country's international creditors.
The draft document, obtained by The Associated Press Thursday, April
11, says the country will have to find 13 billion euros ($17 billion)
- an increase on the 7 billion euro contribution agreed during the
country's chaotic bailout talks last month. The money will be raised by
imposing heavy losses on large bank deposits, levying additional taxes,
privatizations and a part-sale of the central bank's gold reserves.
The so-called troika of international creditors - the European
Commission, the European Central Bank and the International Monetary
Fund - are set to grant the Mediterranean island nation a 10 billion
euros ($13 billion) rescue loan package to recapitalize Cyprus's
shaky banking system and keep the government afloat.
As part of the original deal, Cyprus agreed to overhaul its bloated
banking industry by breaking up its second-largest bank, Laiki,
and imposing losses on savers who have more than 100,000 euros in
another lender, the Bank of Cyprus.
In the latest draft document, the troika has revised the cost of
bailing out Cyprus amid a gloomier economic outlook, adding an extra
6 billion euros to the bill.
The document also shows that the troika expects the break-up of Laiki
to raise 10.6 billion euros. Those funds will be used to prop up the
Bank of Cyprus, the AP says.
Cyprus will also have to sell off parts of its gold reserves - a
measure that is expected to net another 400 million euros - a first
for a bailed-out European country.
The measures in the draft document highlight how Europe's financially
more stable creditor countries are becoming increasingly impatient
with bailing out their southern neighbors and are inflicting harsher
terms on countries in need of assistance. Cyprus is the fifth eurozone
country to receive bailout loans.
The eurozone's 17 finance ministers are gathering Friday at a meeting
in Dublin where, they are expected to discuss the documents spelling
out the details of the assistance package for Cyprus.