News Column

Cyprus Bailout to Reach $30 Billion

April 11, 2013

Cyprus confirmed on Thursday that the size of its international bailout has ballooned to 23 billion euros (30 billion dollars) from 17.5 billion euros, with the country needing to come up with the lion's share of the money.

"The memorandum of November initially focused on 17.5 billion euros in financing but now it has reached 23 billion euros," said government spokesman Christos Stylianides.

Nicosia is now faced with the burden of coming up with the additional money in order to secure a 10 billion euro bailout contribution by its international lenders, the European Commission, the European Central Bank and International Monetary Fund (IMF).

"Who is responsible and how did we reach this point? It was the fear of the previous government to take responsibility for the countries problems," Stylianides told journalists.

The spokesperson made the comments after Cyprus' draft memorandum was revealed on Thursday, ahead of a eurozone finance ministers meeting in Dublin on Friday to discuss the document outlining the details of the assistance package for the country.

He did not say now Cyprus intends to raise the money after already deciding on a range of austerity measures that include additional taxes, privatisations and restructuring the bloated banking sector by breaking up the country's second largest lender, Laiki and imposing heavy losses on bank deposits over 100,000 euros at the Bank of Cyprus.

Responding to questions on whether the country intends to sell 400 million euros of its gold reserves to finance part of the bailout, Stylianides said: "the sale of gold is the responsibility of the central bank to decide."

Cyprus is the fifth eurozone country to receive a bailout and the rescue loans will increase its debt burden to approximately 126 per cent of GDP in 2015.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters