Friday April 18, 2014 Search
Weather | Athens
17o C
11o 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)  
PPC to issue corporate bond of 500 mln
Primary surplus continued by end-March
Eurobank eyes top Core Tier 1 level in Greece
Tourist spending up 17.3 pct
Greece offers to help find Turkish F-16 lost in 1996
Greece officially offered on Thursday to assist Turkey in its efforts to locate and salvage a Turkish Air Force fighter jet which crashed in the Aegean almost 20 years ago. Greek Defense Min...
Talks lined up in wake of ‘shameful’ soccer scenes
The government has pledged to meet with soccer officials after Easter to tackle unruliness in the game following wild scenes at the Greek Cup semifinal between PAOK and Olympiakos in Thessal...
Inside News
BASKETBALL
Former Red Bourousis wrecks Olympiakos´s hopes for a break
Olympiakos tried harder in Game 2 of the Euroleague play-offs in Spain, and Real Madrid was not as good on Thursday as in Game 1, but the Spaniards still emerged victorious on the night with...
SOCCER
Greek soccer turns fishier than ever
Soccer in Greece reached new lows in scenes unseen since the national team’s triumph in Euro 2004, as PAOK and Olympiakos served up a cup semifinal with PAOK emerging as the winner and the s...
Inside Sports
COMMENTARY
The placebo effect and the economy
Among the greatest mistakes made in the years of Greece’s hard landing is that citizens did not get the chance to sense that aside from austerity and pain the economic adjustment program als...
COMMENTARY
Ukraine is a crisis—but not a Cold War
Given Russia’s annexation of Crimea, the imposition of US and European sanctions, and the potential for more escalation in Ukraine, we are witnessing the most important geopolitical events s...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Former Red Bourousis wrecks Olympiakos´s hopes for a break
2. PPC to issue corporate bond of 500 mln
3. Greece offers to help find Turkish F-16 lost in 1996
4. Primary surplus continued by end-March
5. Eurobank eyes top Core Tier 1 level in Greece
6. Tourist spending up 17.3 pct
more news
Today
This Week
1. Greece startup leaders say they can’t break jobless cycle alone
2. Ground-breaking Good Friday mass signals thaw in Cyprus
3. Mayoral candidates clash over Athens mosque plans
4. Seven arrested over Toumba violence
5. National Bank of Greece plans senior unsecured bond sale
6. Greek current account deficit widens in February
Today
This Week
1. Bomb explodes outside Bank of Greece
2. Samaras sees no need for third bailout
3. CCTV footage from Nigrita Prison shows signs of inmate torture [Video]
4. Car bomb explodes outside Greek Central Bank building, no one hurt [Update]
5. Greece's market return mirrors return of tourists
6. Parties start announcing candidates for European Parliament elections
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.