articles | 21 January 2013

Eurogroup postpones Cyprus bailout for 'later'

The eurozone will review in depth an international rescue package for Cyprus at a later date, since not all necessary data is still available, French Minister of Finance Pierre Moscovici said on Monday upon his arrival to take part at a Eurogroup meeting in Brussels.

“We do not have all necessary data in order to make a decision”, he said, adding that ministers will review the matter in depth at a later date.

The French minister expressed his commitment to the unity of the eurozone, highlighting the importance to combine fiscal stabilization and banking union with growth and the creation of new jobs.

Outgoing Eurogroup President Jean-Claude Juncker’s replacement by Dutch Minister of Finance Jeroen Dijsselbloem, a briefing by the Troika (EC, ECB, IMF) on developments related to Cyprus’ application of a rescue package, as well as the next tranche of a rescue package to be released to Greece in the order of 9.2 bln euros are the main issues to be discussed at the Eurogroup meeting on Monday.

On June 25, Cyprus requested financial assistance from the European Stability Mechanism, as its two major banks sought state support after massive write-downs of their Greek bond holdings amounting to 4.5 bln euros, as a result of the Greek sovereign debt haircut.

The Cypriot authorities and the Troika have agreed on a Memorandum of Understanding containing the conditions of the package estimated at 17.5 bln euro, of which about 9-10 bln is earmarked to bail out the banks that are heavily exposed to the Greek market.

Source: Financial Mirror

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