Sunday August 31, 2014 Search
Weather | Athens
31o C
24o 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)  
Disappearing inflation heightens Draghi concerns
Ministry launches work experience program for unemployed graduates
Tax burden in Greece among EUs heaviest, study reveals
Coalition bent on protecting weaker groups
Traveling on public transport in Athens gets cheaper
Commuters will pay 20 cents less for tickets allowing them to use all modes of public transportation in Athens as of Monday, though they will be valid for 70 minutes rather than 90 as was th...
Push made for cuts in education as merger scheme fails
Finance Ministry officials are pressing the Education Ministry to cut costs after it emerged that a program for merging university and technical college departments failed to save 68 million...
Inside News
SOCCER
Tough draw for Greek sides in Europe League Greek stage
Following Thursday nights high, when all three Greek teams competing in the Europa League made it into the group stage of the competition, a harsh reality struck Friday as they found out wh...
JUDO
Greek judoka Iliadis triples up as Aguiar stuns Tcheumeo
Greek star Ilias Iliadis claimed his third world title in the under-90kg category in Chelyabinsk on Friday as Brazilian Mayra Aguiar and Colombian Yuri Alvear won gold in the womens under-7...
Inside Sports
COMMENTARY
Keeping an eye on international developments
The Ukrainian crisis may herald the start of a second Cold War, while there is no shortage of analysts comparing the current international climate to that of 1914 in the runup to World War I...
EDITORIAL
A few good men
It gives us a great deal of hope that we have a new batch of mayors and regional authorities, as well as university rectors who represent the voice of reason and prudence and are unafraid to...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Traveling on public transport in Athens gets cheaper
2. Push made for cuts in education as merger scheme fails
3. Govt aims to curb measures, secure loans, allow tax relief
4. DIMAR chief Kouvelis hints about presidency
5. French expert says Crete crocodile in good health, aged 4-7
6. Tensions mar regional ity swearing-in ceremony
more news
Today
This Week
1. Keeping an eye on international developments
2. A few good men
3. Disappearing inflation heightens Draghi concerns
4. Two men drown off Crete coast in strong tides
5. Traveling on public transport in Athens gets cheaper
6. Push made for cuts in education as merger scheme fails
Today
This Week
1. Attack on gay couple in Athens leaves one man needing surgery
2. Purification rituals
3. The battle against progress
4. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
5. Strong undersea quake occurs off island of Milos, felt in Athens
6. Athens finalizes Paris talks goals
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.