Tuesday September 23, 2014 Search
Weather | Athens
31o C
22o 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 countrys 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 countrys 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)  
Jailed GD MP shown teaching kids how to give the Nazi salute [Video]
Defendants handed prison terms over Antipnoia stabbings
Samaras to meet Merkel in Berlin for pivotal talks
Commission report highlights Erasmus student exchange benefits
Programs target return of 21,000 jobless to work
Greeces Manpower Organization (OAED) will activate two new employment subsidy programs for the private sector in the next few days, offering jobs to 21,620 unemployed individuals. The first...
Employment in commerce keeps sliding
Employment in commerce is continuing to drop, according to data presented on Monday by Vassilis Korkidis, the head of the renamed Hellenic Confederation of Commerce and Entrepreneurship (ESE...
Inside Business
SOCCER
PAOK joins Olympiakos on top after win at Agrinio
Olympiakos spent just two nights alone on top of the Super League, as on Monday evening PAOK joined the champions on 10 points through its 1-0 victory at Panetolikos. The Thessaloniki giant ...
SOCCER
Reds beat Veria to claim league lead
Olympiakos thumped hitherto Super League leader Veria 3-0 on Saturday to go alone on top of the table for the first time after four rounds of games. Four days after putting three past Atleti...
Inside Sports
COMMENTARY
So near and yet so far
Here we are again, so near and yet so far from the coast, in a balancing act of fear between disaster and blurred normality, yet with serious prospects of recovery. Our partners and creditor...
EDITORIAL
Transfer withdrawal
There appear to be significant changes afoot at Greek universities. Academics interested in managing educational institutions as opposed to exchanging favors with unionists and party folk ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Jailed GD MP shown teaching kids how to give the Nazi salute [Video]
2. Defendants handed prison terms over Antipnoia stabbings
3. Samaras to meet Merkel in Berlin for pivotal talks
4. Commission report highlights Erasmus student exchange benefits
5. PAOK joins Olympiakos on top after win at Agrinio
6. Programs target return of 21,000 jobless to work
more news
Today
This Week
1. Alexander the Great's tomb not at Amphipolis, says Culture Minister
2. Venizelos denies jihadis are being trained in Greece
3. Euro touches 14-month low before Draghi testimony
4. Draghi effect subsiding leaves pressure building on ECB chief
5. Civil servants' union calls new strike over evaluation
6. Investors snap up euro zone banks, exporters in ECB bet
Today
This Week
1. Greece at bottom of social justice scale among EU28
2. Greece can meet its needs on its own
3. Central Athens traffic restrictions back in force on Monday
4. Lost in the fog
5. Record sum of new debts to the state in August
6. Democracy under Pressure | Live Streaming
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.