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Cyprus is seeking four billion euro funding

16 November 2012 / 15:11:55  GRReporter
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Cyprus is seeking alternative funding of between 3.5 and 4 billion euro in order not to sign the bailout agreement with the institutional lenders of the International Monetary Fund, the European Central Bank and the European Commission. The country hopes to find resources without having to implement an austerity programme similar to the Greek one and it is seeking funding outside the European Union and from private investors as well.

Cypriot leaders had set great hopes on finding cheaper financing from Russia. These expectations were not confirmed and time has begun to seriously press state governors. According to the information known to date, Cyprus may be short of money for salaries and pensions by the end of the month.

Fileleftheros edition reports that the talks with the lenders’ mission have stalled. President of the Republic, Demetris Christofias, has said after the meeting with the Troika that the negotiations were difficult. The President has stated that the political conditions the foreign lenders have put will not be easily adopted.

Meanwhile, banks in Cyprus are feeling the pressure of the crisis more tangibly and urge the government to take immediate action. After his meeting with the ministerial commission responsible for the negotiations with the Troika, the head of the Central Bank of Cyprus, Panicos Demetriades, has urged that all options be considered in order to sign a new bailout agreement with international lenders. Cyprus’ top banker is clear that it is necessary to ensure recapitalization for local banks in the near future so that they, in turn, support economic development.

Finance Minister of Cyprus, Vassos Siarli, agrees with the head of the central bank and speaks in support of the adoption of the financial aid, but there are still some opponents to the idea in the government. According to Alitia newspaper, Trade Minister Praxoula Antoniadou, who is in the commission that talks with the supervisory Troika, disagrees with Demetriades and Siarli and sees no need for the signing of the bailout.

"The government is playing with fire and time" is the headline of the Friday edition of Simerini newspaper, which refers to the position of the President. Christofias insists that it does not matter when the bailout agreement is signed but it does matter what it will contain.

Currently, lenders insist that Cyprus should make significant cuts in the health sector. Minister for Health, Androulla Agrotou, considers the fiscal adjustment measures in health care very strict but professional circles think they are fair, Simerini reports. Some of the measures related to the reform are: the reduction of salaries of management staff in health care; revising and correcting the lists of insured persons, who are entitled to free medical care; mandatory introduction of protocols for the prescription of medicines and treatments; updating the cost of services; reducing the allowances and the cost of overtime pay.

 

Tags: EconomyMarketsCyprusCrisisSupervisory TroikaNegotiationsBailout
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