Daily Archives: June 27, 2012

Archives June 27, 2012 posted by

EU bailout may reach €10billion

 

CYPRUS may need a bailout of up to €10 billion, over half the size of its economy, officials said yesterday.

The remarks came a day after the island said it was formally applying for help from the European Union’s rescue funds, becoming the fifth eurozone country to seek emergency funding.

Two eurozone officials said that a package of up to €10 billion was being considered for the €17.3 billion Cypriot economy.

“The exact number has not been decided yet. It was to be €6 billion for the state financing and €2.0 billion for the banks but that is optimistic – it is more likely to be seven and three – up to €10 billion in total,” one eurozone official said.

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Our view: Opportunity for Cyprus to put economy on sound footing

IN THE end, the Christofias government failed to secure loans from Russia or China and grudgingly applied to Brussels for a bailout. The decision was taken on Monday, the day Fitch followed the other two credit rating agencies and downgraded the island’s sovereign debt to junk, causing additional problems to the banking sector and the economy.

The news of the bailout came as no surprise, bearing in mind that Popular Bank needs €1.8 billion to meet its re-capitalisation target by Saturday. In fact, the only surprise was that the government left its application so late, clinging to the futile hope it would secure a bilateral loan that would supposedly have strengthened its bargaining power when negotiating bailout terms with the EU.

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Officials to discuss terms next week

EUROPEAN Commission and European Central Bank officials will arrive in Cyprus early next week to start work on the island’s bailout programme, a eurozone official involved in the scheme said yesterday.

An EU commission spokesman said it was not yet clear if the International Monetary Fund (IMF) would be involved in the bailout, but work on putting a team together had already started.

Meanwhile, eurozone finance ministers will hold a teleconference today to discuss the request for emergency lending from Cyprus.

Another eurozone official, speaking on condition of anonymity, told Reuters that teams would begin their trip early next week.

The mission will be the first chance for the experts to dig into the island’s finances and assess how much aid it needs.

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Leaders' briefing on govt measures

IN A MEETING that lasted over two hours yesterday afternoon at the Presidential Palace, President Demetris Christofias briefed party leaders on the package of measures aimed at reining in the island’s deficit.

According to government spokesman Stefanos Stefanou the meeting involved informing and discussing the package of measures with the party leaders as well as informing them on what was being done by the government concerning the recapitalisation of the banks, the attempts to secure a bilateral loan and the request for help from the EU support mechanism.

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'Dog shouldn't be in charge of EU sausage supply'

CYPRUS should not take over the rotating presidency of the European Union on Sunday because it has sought emergency funding, the head of a business group linked to German Chancellor Angela Merkel’s conservatives said yesterday.

Cyprus, which is due to take over the six-month presidency from Denmark on Sunday, has a banking sector heavily exposed to debt-crippled Greece and said on Monday it was formally applying for help from the EU’s rescue funds.

“This is the paradox of the European Union, that the dog should be put in charge of the supply of sausages!” said Kurt Lauk, president of the economic advisory board linked to Merkel’s centre-right Christian Democrats.

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Turkish Cypriot protest

AROUND 350 Turkish Cypriots are due in Brussels today to protest against Cyprus taking over the EU Presidency. 

According to Turkish Cypriot daily Kibris, the protesters are civil society members who will go to Brussels in two planes leased by the authorities of the breakaway regime. There was some confusion in yesterday’s press as to whether the protest would actually take place in Brussels or move to Strasbourg.  

Head of the Social Democracy Party (TDP) Mehmet Cakici was quoted by the paper questioning the reasoning behind the decision to organise a protest now since it’s been known for nine years that Cyprus would take over the EU Presidency.

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Arrest warrants asked for Ayia Napa killings

POLICE have requested arrest warrants in connection with the murder of five people in Ayia Napa on Saturday, though they haven’t released any further details in case it blights the investigation.

“It has been decided that arrest warrants should be requested against specific people,” Justice Minister Loucas Louca said. 

The minister wouldn’t say how many warrants would be requested, saying the number was insignificant. Pressed hard for more information, Louca pointed out: “Any more details could harm further investigation of the case; these persons have definitely been located by the police.”

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Nadir was 'broken man with no hope'

NINETEEN years after he fled Britain on the eve of a trial Asil Nadir yesterday entered the Old Bailey witness box to tell the jury he was innocent of plundering his own company of nearly £150 million.

Nadir, now 71, is accused of leaving a gaping black hole in the finances of Polly Peck International to spend on himself, his family and friends.

He told the court he fled Britain because he was a “broken man without hope”.

Nadir said he could not see how he could get a fair trial on theft charges in 1993.

Nadir said: “I was a totally broken man. My health was in tatters, my hope of a fair trial was in tatters, I had zero hope of receiving a fair trial.”

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EAC gets grilling for failing to cut prices

LAWMAKERS laid into the Electricity Authority (EAC) yesterday for making no effort to reduce power charges.

Speaking after the House Commerce Committee convened to see what measures the EAC had taken, DIKO’s Nicolas Papadopoulos was especially harsh. “Today we saw yet another recital of the monopoly’s arrogance. The EAC, in regards to reducing the cost of electricity, repeated this government’s fixed mantra: others are to blame for everything,” said Papadopoulos. “The high cost of electricity is ‘because of (the energy regulatory authority) RAEK, fuel… it isn’t our fault’. Once again we have heard attempts to shake off responsibilities.”

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