Eurogroup president Jean-Claude Juncker said he did not expect a financial aid package for Cyprus to be agreed at a meeting of eurozone finance ministers in Brussels on Thursday.
“I don’t think that we can find a definitive solution for Cyprus today,” he told reporters as he arrived for the meeting. “It will probably be done in January.”
Cyprus, one of the smallest economies in the 17-nation euro zone, sought aid in June to buffer banks substantially exposed to debt-crippled Greece.
It says it has reached a preliminary aid deal with the European Union and the International Monetary Fund.
The cost of recapitalizing the island’s banking sector could be as high as 10 billion euros – more than half of Cyprus’s annual output.
That would make the bank bailout one of the biggest ever as a proportion of GDP, the island’s central bank governor Panicos Demetriades said on Wednesday, second only to the 1997 bank bailout in Indonesia. [Reuters]