March 16, 2013

Approval of aid program for Cyprus

Goedkeuring steunprogramma voor Cyprus ( <=Dutch government website)

Approval of aid program for Cyprus

The finance ministers of the euro countries have reached a political agreement in the night of 15th & 16th of March about an aid program for Cyprus of maximal 10 bn euros. The loan will be provided by the European emergency fund ESM. The troika-parties will during next week further work out the side(?)conditions of the program with the Cypriot government.

Finance minister and Eurogroup chief Dijsselbloem on the program: "By involving the depositors the bill will not entirely be presented to the tax payers. Cyprus will now get a chance for economic recovery and renewed growth again."

Parts of this program are:

- a one time stability charge on savings of 6,75% up to 100.000 euro and 9,9 % above 100.000 euro.

- an increase of the tax deducted at source on interests from 10 to 12,5 percent.

- a restructuring of the banking sector

- privatizations and the sell-off of a part of the Cypriot gold reserves

Cyprus has applied for emergency support of the euro countries in June 2012. The economy and the banks of Cyprus are closely entangled with those of Greece. That makes them vulnerable. The financial  support is intended for governmental finances as well as to fix up the banks.

For the support the same strict conditions apply as for Greece, Ireland and Portugal

Disclaimer: The author isn't a professional translator and is not responsible for any misunderstanding, slightly inaccurate translation of the original text issued by Dutch finance ministry. So please regard translated text as an indication of what is communicated by the ministry. Please ask for confirmation  by Mr Dijsselbloem or his staff.