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The Board of Directors of the European Stability Mechanism (ESM) approved today the disbursement of €100 million to Cyprus. This follows the approval of the updated Memorandum of Understanding (MoU) by the ESM Board of Governors and the positive assessment of the second quarterly review of Cyprus’s macro-economic adjustment programme.
The current disbursement will bring the total amount of ESM financial assistance for Cyprus to €4.6 billion. The remaining portion of the approximately €9 billion committed to Cyprus by the ESM is scheduled to be paid in quarterly disbursements by 2016.
There is an online information package on the financial assistance programme for Cyprus here.
Commission approves third prolongation of Cypriot bank guarantee scheme
On 18 December, the European Commission authorised, under EU state aid rules, a prolongation until 30 June 2014 of a Cypriot guarantee scheme for credit institutions. The original scheme was approved on 6 November 2012 (see IP/12/1171). It was prolonged a first time in January 2013 (see MEX/13/0122) and a second time in July 2013 (see MEX/13/0725) . The Commission found this third prolongation of the measure to be in line with its guidance on support measures for banks during the financial crisis (see IP/13/672 and MEMO/13/886). The prolonged measure is targeted, proportionate and limited in time and scope. The Commission has, therefore, concluded that the guarantee scheme represents an appropriate means of remedying a serious disturbance in the Cyprus economy and as such, is compatible with Article 107(3)(b) of the Treaty on the Functioning of the EU (TFEU). During the application of the extraordinary crisis rules for state aid to banks, the Commission is authorising guarantee schemes on banks’ liabilities for periods of six months in order to be able to monitor developments and adjust conditions accordingly.