Friday March 6, 2015 Search
Weather | Athens
20o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Cyprus talks with lenders as debt sustainability in focus

Cyprus launched a last-ditch bid with potential lenders on Friday to get financial aid needed before coffers in the tiny eurozone economy start running dry.

Battered by its exposure to debt-crippled Greece, Cyprus sought a full bailout from the EU and the IMF in June to buffer its banks and plug widening deficits after attempts to secure a credit line from Russia failed.

The government has said it could have difficulties paying salaries in December. It is currently heavily reliant on short-term financing from domestic banks.

Economists from the European Central Bank, the International Monetary Fund and the European Commission, known as the «troika», arrived for talks at the finance ministry on Friday morning. They did not speak to journalists.

The size of the potential bailout -- speculated to be anything between 11 and 16 billion euros and the bulk of it for banks -- will be huge in proportion to the 17.9 billion euro economy, the third smallest in the euro zone.

Debate on how Cyprus will manage to pay it back will feature prominently in discussions. Cyprus says it wants the eurozone's ESM bailout fund to recapitalise the banks directly, but heavyweights in the bloc disagree with the ESM undertaking legacy debt.

"Economically the biggest challenge of these talks will be how to get a deal which make the debt sustainable,» said economist Fiona Mullen at Sapienta Economics.

The IMF, which announced its participation in the mission on Wednesday, hinted as much: It said it wanted a 'financing solution consistent with debt sustainability'.

Cyprus is already staring at a public debt which catapulted from 71 percent of GDP in 2011 to about 90 percent this year after coming to the aid of its second largest bank, Popular.

Lenders want savings of almost one billion euros per year, privatisations, wage cuts in a public sector which is one of the most highly paid in Europe, a culling of wage indexation and the creation of a «bad bank» to park soured assets.

Cyprus says it will not privatise «profitable» state enterprises and its leftist President Demetris Christofias says he is prepared to take to the streets to defend wage indexation.

Friday's talks were open ended, but it was unlikely that a deal was imminent, a senior Cypriot official said on condition of anonymity.

[Reuters]

ekathimerini.com , Friday November 9, 2012 (15:26)  
Jobless rate starts picking up again
Election lifted consumers’ mood
ECB decisions may prove to be a blessing in disguise
Market sees gov’t yielding after pressure
PM, FinMin in diplomatic push to sell measures
Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis are launching a diplomatic offensive, with calls to several European counterparts, in a bid to lay the groundwork for anot...
Police seeking missing student to recall key witnesses
Police in Ioannina, northwestern Greece, are to conduct a new round of interviews with students at the city’s Dairy School and other acquaintances of missing student Vangelis Giakoumakis in ...
Inside News
SOCCER
Greece need to attack more, new coach Markarian says
Greece coach Sergio Markarian said Thursday he wanted Greece to play more attacking football against Hungary in a Euro 2016 qualifier on March 29 as his side strive to move off the bottom po...
SOCCER
Super League restarts, but behind closed doors
Deputy Minister for Sports Stavros Kontonis announced on Wednesday the resumption of the Super League this weekend after it was suspended last week following crowd trouble at the Athens derb...
Inside Sports
COMMENTARY
PISA, Schengen, mediocrity and isolation
Greece’s most serious problem is not the economic and political crisis, though it did contribute greatly to it. At the root of our evil lies our great isolation, not only from our partners i...
COMMENTARY
Greek-Turkish relations
There are other issues beyond those focusing on the economy that the government, formerly of the “Indignants” and currently adapting – willingly or unwillingly – to eurozone realities, is fa...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. PM, FinMin in diplomatic push to sell measures
2. Jobless rate starts picking up again
3. Police seeking missing student to recall key witnesses
4. Election lifted consumers’ mood
5. State will keep paying priests´ salaries, Greek gov´t says
6. ECB decisions may prove to be a blessing in disguise
more news
Today
This Week
1. Greek-Turkish relations
2. Greece seeks to plug its 'Bermuda Triangle' of lost taxes
3. Greece struggles to make debt math work amid bailout standoff
4. Greece has backup plan if March bailout cash fails to arrive, says Varoufakis
5. Draghi details sought as ECB's QE plan poised to be fleshed out
6. Government policy
Today
This Week
1. Greece to make international protest over Turkey reserving Aegean air space
2. SYRIZA feeling the pain
3. The Greek tax drama
4. The unlikely winners of Greece's surrender on euro
5. Varoufakis to make six reform proposals at Monday's Eurogroup
6. Tsipras reversal draws Greek sympathy as party rumblings rise
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.