Eurogroup says new Cypriot plans must meet with troika approval, EU hopeful

The Eurogroup has said on Thursday night it will wait for clearance from the troika on the legislation drawn up by Cyprus to secure the financing it needs in order to agree a bailout with the eurozone and International Monetary Fund.

“The Eurogroup stands ready to discuss with the Cypriot authorities a draft new proposal, which it expects the Cyprus authorities to present as rapidly as possible,» a statement read following a conference call involving eurozone finance ministers.

“The Eurogroup would subsequently, on the basis of a Troika analysis that needs to be undertaken, be prepared to continue negotiations on an adjustment program, while respecting the parameters defined earlier by the Eurogroup,» the minister said.

“After the conclusion of such negotiations the Cyprus authorities should begin legislating the elements of such an agreement.

 The Eurogroup stressed the importance of fully guaranteeing deposits below 100,000 euros in its statement.

The Europeean Commission also welcomed the moves by Nicosia on Thursday, which included plans to creation a national solidarity fund.

“We appear to be seeing an improved spirit of cooperation on the part of the Cypriot authorities,» said an EU spokesman. «In particular we welcome the Cypriot authorities’ assurances that they will present in detail to the Troika their alternative proposal for covering the part of Cyprus’ financing needs outside of the agreed financing envelope. Our staff will assess this proposal carefully as of tomorrow morning.”

The EU officials also stressed that Brussels welcomes the fact that the Cypriot government is preparing legislation to wind down Cyprus Popular Bank and impose capital controls when lenders reopen next week.

“We are conditionally satisfied that the bills on bank resolution and restriction of capital movements are moving through the legislative process.

“We now need to move into top gear and work intensively with the Cypriot government and our Troika partners to design a viable alternative solution that can be acceptable to all euro area member states.”

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