Tuesday September 2, 2014 Search
Weather | Athens
29o C
23o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Cyprus could lower debt post-bailout with ESM

Financial aid for Cyprus could push its debt to 140 percent of its national output unless the EU's permanent bailout mechanism assumes some of the burden, the island's central bank governor said on Wednesday.

Panicos Demetriades, also a member of the Governing Council of the ECB, said lowering the debt level was possible if the European Stability Mechanism took over some of the debt. That prospect, he said, was contingent on agreement on an EU banking union.

"Despite the difficulties, I am cautiously optimistic that a compromise on the banking union is in sight, Demetriades told the Hellenic American Bankers Association in a closed session in New York on Tuesday evening.

The remarks were released on Wednesday. European Union finance ministers were scheduled to meet in Brussels later in the day to discuss the banking union, an issue now in deadlock.

Cyprus, one of the smallest economies in the 17-nation eurozone, sought aid in June to buffer banks substantially exposed to debt-crippled Greece. It says it has reached a preliminary aid deal with the EU and the International Monetary Fund, but approval and disbursement of aid is not seen until late January, at the earliest.

The cost of recapitalising the island's banking sector could be as high as 10 billion euros -- more than half Cyprus's annual output.

"As a proportion of GDP it is one of the largest bank bailouts ever, second only to the 1997 bank bail out in Indonesia, Demetriades said.

The total cost of bailing Cyprus out is estimated at 17.5 billion euros -- including the cost of rescheduling 6.0 billion euros in maturing debt and 1.5 billion euros to cover deficit shortfalls until 2016.

But a net of 11.5 billion euros -- 10 billion euros for banks, and 1.5 billion euros for deficits -- would push debt levels to 140 percent of GDP. At that level, it is beyond the debt sustainability threshold of the IMF.

The level could be lowered to 100 percent, if 6.5 billion were directly injected to the island's banks from the ESM, Demetriades said. This prospect is, however, dependent on progress with the establishment of a banking union in the euro area.

[Reuters]

ekathimerini.com , Wednesday December 12, 2012 (12:55)  
Tourism targets rise ever higher
Horse race betting hurdle removed for OPAP
Revised GDP data confirm that Greek growth is near
Measures to reduce unemployment
Education minister calls for probe into predecessors reform plan
Following reports that a plan to reform the tertiary education sector launched in the spring of 2013 failed to lead to millions of euros in savings, Education Minister Andreas Loverdos on Mo...
Anti-racism bill goes back to Parliament
An anti-racism bill, foreseeing stiffer penalties for individuals and political parties that engage in racism or incite racist violence, is to be debated in Parliament on Tuesday following m...
Inside News
BASKETBALL
Greek hoopsters go top of their group in World Cup
Greece has qualified to the second round of the FIBA World Cup after going top of its group of six through a third win in as many group games in Spain. On Monday it beat Puerto Rico 90-79 in...
SOCCER
Fulham striker Mitroglou set to re-join Olympiakos
Greek champions Olympiakos Piraeus are set to re-sign Kostas Mitroglou on loan from English second tier club Fulham after the striker arrived in Athens for talks on Sunday. An Olympiakos spo...
Inside Sports
ANALYSIS
EUs three big problems all linked
The outgoing president of the European Council, Herman Van Rompuy, said at the weekend that his successor, Donald Tusk, currently Polands prime minister, faces three big challenges: the sta...
COMMENTARY
A great president
I fully understand the countrys need for political stability, a necessity which makes the election of a president by the current Parliament absolutely imperative. At the same time, however,...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Greek hoopsters go top of their group in World Cup
2. Tourism targets rise ever higher
3. Horse race betting hurdle removed for OPAP
4. Revised GDP data confirm that Greek growth is near
5. Measures to reduce unemployment
6. Peachy export data despite Russian embargo
more news
Today
This Week
1. Excavation work at Amphipolis reveals section of marble mosaic floor
2. A great president
3. Erdogan visits Turkish-occupied Cyprus
4. Greek economy shrinks at slowest pace since late 2008
5. Dont feed the zombies
6. Greek officials meet to fine tune strategy for Paris talks with troika
Today
This Week
1. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
2. The battle against progress
3. Attack on gay couple in Athens leaves one man needing surgery
4. Strong undersea quake occurs off island of Milos, felt in Athens
5. Greek quest for debt relief faces hurdles in Paris
6. Hardouvelis, ECB executive discuss bank program, stress tests
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.