The terms of Cyprus’ financial assistance programme have been agreed, Finance Minister Vassos Shiarly has said, clarifying that the programme cannot be considered completed as long as the total amount for recapitalisation of the Cypriot financial sector is still pending.
“We have completed the first and most important stage which concerns the terms of the memorandum,” he said, adding that the details of the programme will be processed so that the programme will be officially submitted to the Euro area Finance Ministers (Eurogroup).
Shiarly explained that the agreement is not finalized as the results of the due diligence audit, carried out by Pimco on the capital needs of the Cypriot financial sector, are expected to be announced in early December.
In statements yesterday, Shiarly said that the Cypriot financial assistance programme may reach 17.5 billion EUR, 10 billion for the recapitalisation of the banking sector, 6 billion for the state refinancing needs and 1.5 billion for the public deficits until for the period of 2012 – 2016.
“When we receive this report then we will be able to complete the programme which will be submitted officially to the Eurogroup for approval,” he added.
Responding to questions, Shiarly said that the Cypriot programme may be discussed on the Eurogroup level at December 12.
However he warned that the Cypriot programme may need more than one Eurogroup meetings as is the case of the Greek financial assistance programme.
Cyprus applied on June 25 for financial system from the EU bailout mechanism to rescue its two major banks which sought state aid following mammoth losses due to their heavy exposure to the Greek economy and to secure its refinancing needs