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Cyprus bailout talks in Brussels

brussels bureau

Cyprus bailout talks in Brussels


At the Brussels meeting of eurozone finance ministers with IMF chief Christine Lagarde to discuss a 10 billion euro bailout for Cyprus, euronews correspondent Isabel Marques da Silva voiced the questions that are preoccupying them

“Will a small country like Cyprus, with a population of one million, be able to repay a troika loan equivalent to the wealth it produces in one year? Will giving Cyprus a less favourable deal than the one given to Portugal, Ireland and Greece affect the market’s trust in the future of the eurozone? These are the issues on the table at this extraordinary eurogroup meeting.”

Cyprus asked for a bailout last June. The country’s ties with Russia – and suspicions of money laundering – have concerned the EU, but not solving the problem could be dangerous for crisis contagion as Eurogroup president Jeroen Dijsselbloem, Eurogroup explained.

“My main goals are to make sure there is stability in the eurozone and that there is a new sustainable growth path possible for Cyprus again and those are the boundaries in which we have to find a solution,” Dijsselbloem said.

Cyprus needs about 17 billion euros, but international lenders like IMF will not be keen to help out and private investors’ losses are being considered.

EU advisor Maria João Rodrigues said EU partners must act swiftly on this: “The speed of response is a key point of political efficacy and, from that point of view, it is unfortunate that the decision in the case of Cyprus, being a small country, is being dragged this way. We could say that we didn’t learn anything from the Greek crisis. I’m in favour of a solution that relies increasingly on European mechanisms rather than the International Monetary Fund.”

The final decision should be taken next week, in another extraordinary Eurogroup meeting.

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