Cyprus and international lenders have agreed on the terms of a bailout needed by the eastern Mediterranean country to refinance its banks and pay bills, said Panicos Demetriades, also governor of the Central Bank of Cyprus.
“The memorandum has been agreed and the only thing missing is the exact amount which will be discussed at a Eurogroup meeting”, Demetriades told reporters in Nicosia today. “The main thing is that there is an agreement.”
The exact amount needed to recapitalise Cypriot banks, which will determine the total bailout amount, hasn’t been established yet while the so-called troika of the International Monetary Fund, the European Central Bank and the European Commission estimates the lenders may need €10 billion, Demetriades said. The deal with creditors ensures the viability of Cypriot debt, he said.
The country may need as much as €17.5 billion in aid, almost the size of its economy, based on the €10 billion figure for the banks, €6 billion to refinance state debt from 2013 to 2016, and €1.5 billion to cover fiscal deficits, Shiarly also said on November 22nd.
An agreement with international creditors will require a fiscal adjustment of about 7.3 per cent of gross domestic product between 2012 and 2016, Cyprus’s Finance Ministry said yesterday. The country aims at a primary surplus of 4 per cent of its economy by 2016, it said.
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