Sunday April 19, 2015 Search
Weather | Athens
14o C
09o 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)  
US Treasury secretary urges Greece to reach debt deal
Greece poised to sign gas deal with Russia, says German weekly
Russia gas deal would not solve Greece’s problems, says Schaeuble
Spanish official slams Greece, says time ´running out´
Kotzias to begin US visit with Kerry meeting in Washington
Foreign Minister Nikos Kotzias is due to begin a five-day visit to the US on Monday. He will begin his trip by meeting Secretary of State John Kerry in Washington, where he will also hold ta...
Turkey asks for investigation into Greek mosque attacks
The Turkish Foreign Ministry has asked Greece to investigate the vandalism of two mosques in Komotini following incidents on Friday. “Turkey requests Greek authorities to clarify as soon as ...
Inside News
BASKETBALL
Triumph for Olympiakos at Barcelona
Olympiakos produced its best away performance so far this season to defeat host Barcelona 76-63 on Friday and snatch the home advantage in the Euroleague play-offs. The Reds have now tied th...
BASKETBALL
Another heavy loss for improved Panathinaikos in Moscow
Panathinaikos raised its performance since Tuesday but still suffered a 20-point loss at CSKA Moscow on Thursday to find itself trailing 2-0 after Game 2 of the Euroleague play-offs. Having ...
Inside Sports
COMMENTARY
Back to the beginning
From 1980 up until the present day, the Greek educational system has given a false sense of democratization based on a flawed system of educator and student participation. The educational ou...
EDITORIAL
Protecting a key asset
Tourism has emerged as the only real “heavy industry” in Greece to have weathered the crisis so it is not only a question of duty that everyone protect it but also interest. To begin with, m...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. US Treasury secretary urges Greece to reach debt deal
2. Greece poised to sign gas deal with Russia, says German weekly
3. Russia gas deal would not solve Greece’s problems, says Schaeuble
4. Spanish official slams Greece, says time ´running out´
5. Kotzias to begin US visit with Kerry meeting in Washington
6. Turkey asks for investigation into Greek mosque attacks
more news
Today
This Week
1. Back to the beginning
2. Golden Dawn on trial amid conflict over court venue
3. Terrorism suspects caught following German request
4. US Treasury secretary urges Greece to reach debt deal
5. Greece poised to sign gas deal with Russia, says German weekly
6. Turkey asks for investigation into Greek mosque attacks
Today
This Week
1. Quarantine for Greek bank subsidiaries in neighboring countries
2. Greek finance ministry hits back at German newspaper report
3. Time to get serious
4. 'Civil war' brewing over disputed Greek goldmine
5. In the shadow of Greek prison, locals dread Golden Dawn trial
6. Putting off payments led to Q1 budget primary surplus
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.