Tuesday October 21, 2014 Search
Weather | Athens
24o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Eurogroup signs off on bailout agreement reached by Cyprus and troika

Cyprus, the European Union and the International Monetary Fund reached deal in Brussels in the early hours of Monday morning aimed at preventing the bankruptcy of its main banks and a possible euro exit.

“We did not win a battle but we avoided a disastrous exit from the eurozone,” said Cypriot Finance Minister Michalis Sarris after the Eurogroup meeting.

“We have a deal which is good for Cyprus and the European Union,” said Cypriot President Nicos Anastasiades as he left after lengthy talks, during which he was reported to have threatened to resign due to pressure from the troika.

The agreement reached by Anastasiades, International Monetary Fund managing director Christine Lagarde, European Central Bank president Mario Draghi and European Commission Economic and Monetary Affairs Commissioner Olli Rehn after several rounds of talks in Brussels was rubber stamped by the Eurogroup.

The deal foresees the country’s second largest lender, Cyprus Popular Bank (Laiki), going through an immediate resolution process that will see deposits under 100,000 euros, which are guaranteed, being put into a good bank.

Non-performing loans and uninsured deposits will be placed in a bad bank, which will be liquidated over time. Bondholders and shareholders are also set to lose out. This is set to raise 4.2 billion euros.

“There is no denial that Cypriot people will go through tough times as a result of mistakes at the banking level and fiscal excesses,” said Sarris.

The good bank will be merged with the country’s largest lender, the Bank of Cyprus. Uninsured deposits at BoC will face a haircut but none of the officials in Brussels were able to say how large the levy would be. The aim is to achieve a capital ratio of 9 percent.

Sarris indicated that uninsured depositors, including pension funds, would receive equity in return for their savings as part of a recapitalization process.

He also confirmed that the Bank of Cyprus would take over the 9 billion euros of Emergency Liquidity Assistance that the ECB has provided to Laiki. Eurogroup president Jeroen Dijsellbloem said it was likely that the ECB would continue providing liquidity to Bank of Cyprus from Monday.

Deposits at other banks will not be taxed and none of the 10 billion euros Cyprus is to receive from the troika will be used to recapitalize its lenders.

It is not clear when Cypriot banks will open again. Sarris and Dijsellbloem said authorities would assess the situation from Monday before taking a decision.

Nicosia is due to receive its first bailout instalment in May. The IMF will also contribute to the package but Lagarde could not yet say how much.

It is not clear how much this set of measures will raise but Dijsellbloem said it the original figure of 5.8 billion euros should be disregarded.

“The near future will be very difficult for Cyprus but we will work together to overcome problems,” said Rehn, who added that an EU Task Force would be formed to help Cyprus.

“We can start working today to help Cypriot people rebuild their economy,” he said.

ekathimerini.com , Monday March 25, 2013 (05:37)  
Wage dispute hurts gov’t unity before troika return
Most Britons want to see Parthenon Marbles back in Athens, poll shows
Turkey tests Cyprus after research vessel encroaches on offshore gas area
Doctors’ disciplinary panel needs surgery
ANALYSIS
At loggerheads over role of the IMF
The Greek coalition government’s plan for a clean exit from the European Union / International Monetary Fund program was dealt a deadly blow by the markets last week on the back of rising po...
Hong Kong telecom group buys out Greek start-up
Hong Kong-based telecommunications multinational PCCW Global has announced it has bought out Greek start-up Crypteia Networks, aiming to incorporate its products into the group’s portfolio. ...
Inside Business
BASKETBALL
PAOK fans stop coach Markopoulos´s move to Olympiakos
Olympiakos is once again in the lookout for a new coach after the refusal of PAOK to release Soulis Markopoulos, while Panathinaikos defeated Kolossos on Rhodes on Monday to become the only ...
BASKETBALL
Reds lose to Nea Kifissia, search for new coach
Nea Kifissia recorded the biggest win of its short history in the top flight defeating Olympiakos 68-67 on Sunday, in a Basket League weekend marred by the abandonment of the Thessaloniki de...
Inside Sports
INTERVIEW
The past, present and future of the Greek debt crisis
For a decade, until mid-2012, Josef Ackermann was the CEO at Deutsche Bank. It was a position that earned him the nickname “shadow chancellor” of Germany and allowed him to play a decisive r...
COMMENTARY
Self-opposing coalition
Even though a number of polls see the total percentage of the two ruling parties trailing that of SYRIZA, New Democracy and PASOK are still in government and the leftists in opposition. This...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. PAOK fans stop coach Markopoulos´s move to Olympiakos
2. At loggerheads over role of the IMF
3. Hong Kong telecom group buys out Greek start-up
4. Local tourism could see more arrivals, investments next year
5. Troika exerts pressure using return date
6. Wage dispute hurts gov’t unity before troika return
more news
Today
This Week
1. Greece must stick to reforms, says Schaeuble
2. Bakers encircle Thessaloniki's White Tower with giant 'koulouri'
3. Turkish vessel enters Cypriot Exclusive Economic Zone
4. European leaders pivot back to debt crisis after wake-up call
5. Hardouvelis does not see 'big surprises' in ECB stress tests
6. Stop moaning and get in the game
Today
This Week
1. Possible third figure in Amphipolis mosaic may be uncovered shortly
2. Greece to contribute 1 mln towards Gaza reconstruction
3. Greece nearing bailout exit, says gov't spokesperson after IMF talks
4. Istanbul skyscraper casts shadow over Greece's banking ambitions
5. Coalition shooting itself in the foot
6. GPO poll gives SYRIZA clear lead over New Democracy
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.