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Cyprus bailout tops Eurogroup agenda

Cyprus bailout tops Eurogroup agenda
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Eurozone finance ministers are set for fresh talks on a bailout for Cyprus.

They will start on Monday at a Eurogroup meeting and a senior eurozone official said they want a deal with the island’s new government by the end of this month.

The election in Cyprus has moved things forward as the previous administration had refused to sell state assets to cut debt – a precondition for the estimated 17 billion euro aid package.

New president Nicos Anastasiades has promised to work for a quick deal, but is firmly opposed to a Greek style solution with losses for investors.

He told the incoming parliament: “We will negotiate for the conclusion of a loan agreement as soon as possible, but I want to be absolutely clear. Any reference to a haircut on public debt or deposits will not be tolerated and shows a lack of solidarity. Such an issue isn’t even up for discussion,”

In Brussels, the biggest worry over Cyprus is how it would ever find the money to repay a bailout as it is one of the eurozone’s smallest economies.

Germany, particularly, also wants guarantees about financial transparency; it fears the island’s low-tax status is leading to money laundering by rich Russians. Cyprus insists it is clean and is following all EU banking rules.

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