Monday November 24, 2014 Search
Weather | Athens
14o C
10o 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)  
ILO calls for urgent action in Greece to create jobs, tackle social problems
Draghi urgency for ECB action gets final reality check
Greece to scrap need for permits in some 900 professions
Lack of EU funding puts future of Panepistimiou, Faliro revamp projects in doubt
Greek air traffic controllers say they will join Thursday´s general strike
Greek air traffic controllers said on Monday that they will take part in Thursday’s general strike, which is likely to lead to disruption at the country’s airports. The strike has been calle...
Livestock breeders to protest in central Athens on Tuesday
Greek livestock breeders are due to protest in central Athens on Tuesday in the hope they will be able to secure a meeting with officials from the Agriculture Ministry. The farmers are due t...
Inside News
BASKETBALL
Olympiakos ends PAOK´s unbeaten run in Basket League
Olympiakos put an end to PAOK’s unbeaten run in the Basket League with an emphatic win at the Peace and Friendship Stadium, leaving Panathinaikos as the only team with a perfect record so fa...
INTERVIEW
Tokyo hopes to change the world
The 2020 Summer Olympic and Paralympic Games in Tokyo will serve as a springboard for the rebuilding of Japan’s image and economy following the triple blow of the earthquake, tsunami and nuc...
Inside Sports
COMMENTARY
Extremism from a bygone era
There are times when we seem to be overcome by self-destructive madness. I hear various commentators and politicians speaking in extreme terms of a junta, of defections, gallows, collaborato...
EDITORIAL
No call for more games
Psychological warfare has been a part of the negotiations between the troika and Athens from the very start of the crisis. But the situation is much different now and troika decision-makers ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greek air traffic controllers say they will join Thursday´s general strike
2. ILO calls for urgent action in Greece to create jobs, tackle social problems
3. Livestock breeders to protest in central Athens on Tuesday
4. Draghi urgency for ECB action gets final reality check
5. Greece to scrap need for permits in some 900 professions
6. Greek government sees Paris meeting as ´last phase´ in troika talks
more news
Today
This Week
1. Scientists expand excavation of ancient Amphipolis
2. Greek officials to meek troika chiefs in Paris to break review stalemate
3. EU said to plan 21 billion-euro risk-sharing fund for investment
4. Biden informs Anastasiades about content of talks with Erdogan
5. Police seek to name man who opened fire with AK47 at Piraeus bar
6. Countdown to missed opportunity for EU economy
Today
This Week
1. Double quake on Atalanti fault line rattles Greek capital [Update]
2. Biden heads to Istanbul amid tension over Cyprus EEZ violation
3. Anti-junta uprising anniversary to be marked amid tight security
4. Every age has its collaborators
5. Give Greece a chance
6. Carlsberg takes control of Greek brewer Olympic Brewery [Update]
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.