Eurozone finance ministers will let an independent commission examine charges of money laundering in Cyprus. Only then will they begin to think about an aid programme for the highly-indebted island country.
When new Eurogroup chief Jeroen Dijsselbloem chaired his first meeting of the Eurogroup, the difficult decision on how the EU can help ailing Cyprus was not on the agenda - yet. The Eurogroup is waiting for the outcome of February's presidential elections on the island to know whom to negotiate with. Cyprus' President Demetris Christofias is the EU's only communist head of state and has close ties to Moscow. Russian financial ties to the meanwhile crippled banks on the island country are just as close. Accusations of money laundering and tax evasion hang in the air - one reason the German government has hit the brakes on the issue of granting a rescue package to Cyprus.
Germany insists the bank issue has to be resolved first. German Finance Minister Wolfgang Schäuble said the ministers decided Cyprus must "set up an independent institution to reliably document the implementation of money laundering standards in Cyprus". He added Cyprus must do more in that respect. Several German politicians have also demanded taking untapped Cypriot natural gas reserves as security for the bailout package.
Cypriot Finance Minister Vassos Shiarly rejects the allegations of money laundering, protesting that his country's financial sector is clean. He said Cyprus has done everything it was requested to do and that it's in a good position to continue on that path. Shiarly angrily dismissed speculation that losses would be forced on depositors in Cypriot banks and investors in the country's sovereign bonds. "Under no circumstances will we accept that", he said, supported by Luxembourg Prime Minister and former Eurogroup chief Jean-Claude Juncker.
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