Cyprus's new finance minister, Michalis Sarris, set out his strategy in negotiating a €17 billion bailout from the eurozone and the International Monetary Fund.
Cyprus will meet its would-be creditors halfway on privatisations, shrinking its financial-services sector and auditing its anti-money-laundering framework, he said, but won't tolerate talk of a depositor bail-in that has sparked depositor flight in recent weeks.
The previous Cypriot administration, led by Europe's last communist head of government, had rejected calls for privatisations by the so-called creditors' troika—the European Commission, the European Central Bank and the IMF. The new president, conservative Nikos Anastasiades, has said he would consider privatisations, but three years down the line. Mr Sarris said he won't adhere to a schedule for the privatisations, indicating sales could take place before the three-year horizon set by Mr Anastasiades. "It could be that conditions can be met very quickly", he said, stressing that it is crucial workers' interests and market competition are protected.
The troika wants Cyprus to let a private sector firm to carry out an audit of banks' anti-money-laundering practices. Mr Sarris said the audits should be carried out by Moneyval—an organisation in which EU Member States participate—with the help of private experts who will vouch to protect the identity of innocent depositors. The bailout deal is likely to be sealed at an extraordinary meeting of eurozone finance ministers in late March, Mr Sarris said. Some eurozone national parliaments, including paymaster Germany's, will need to ratify it.
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