The government has negotiated very hard the terms of Cyprus’ bailout agreement with the Troika (European Commission, ECB, IMF), aiming at safeguarding national interests and the workers’ vested rights, Government Spokesman Stefanos Stefanou said today.
Speaking one day after the President’s televised address to the nation on the agreement, Stefanou said the government “has achieved a lot of things in various areas” through the negotiation, bearing in mind the particular circumstances under which this process took place, due to the need to recapitalize the banking sector.
The government was forced to discuss issues which would have never been broached under different circumstances, Stefanou said.
He reiterated that the reason behind Cyprus’ request to the EU bailout funds was the situation in the banking sector, requiring an enormous amount for its recapitalization, equal to one quarter of the state budget.
The problem, he explained, was created by the decisions taken by the administrations of the banks, resulting in exposure to the ailing Greek economy. Stefanou further noted that the supervision of the banking sector belongs to the Central Bank and not the government.
Moreover, he said that the state’s financing needs until 2016 amount to 1.5 bln euros, excluding the amount that will be required for the recapitalization of the banking sector.
Stefanou was asked by the Press on recent statements by Russian Acting Minister of Finance Anton Siluanov, who said that an eventual loan from Moscow to Nicosia was unlikely after the bailout agreement with the Troika.
In reply, Stefanou said that he was not going to comment on that, since it concerns statements by foreign officials, but added that Cyprus is faced now with a very concrete process, following the initial agreement with the Troika and while the recapitalization assessment of the banking sector is pending.
In relation to criticism against the government over housing policy provisions, Stefanou said that the present administration has raised housing funding schemes and loans.
Even after the cuts, he added, these schemes continue to be higher than in the previous administration.
The Government of the Republic of Cyprus informed on the 25th of June 2012 the appropriate European Authorities of its decision to submit to Eurozone member states a request of financial assistance from the EFSF/ESM. The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spill over effects through its financial sector, due to its large exposure in the Greek economy.