News / Europe

Eurozone Ministers Approve Cyprus Loan

Jorg Asmussen, left, European Central Bank Executive Board member, and Cyprus Finance Minister Harris Georgiades in Dublin Castle, Ireland, April 12, 2013.Jorg Asmussen, left, European Central Bank Executive Board member, and Cyprus Finance Minister Harris Georgiades in Dublin Castle, Ireland, April 12, 2013.
x
Jorg Asmussen, left, European Central Bank Executive Board member, and Cyprus Finance Minister Harris Georgiades in Dublin Castle, Ireland, April 12, 2013.
Jorg Asmussen, left, European Central Bank Executive Board member, and Cyprus Finance Minister Harris Georgiades in Dublin Castle, Ireland, April 12, 2013.
Selah Hennessy
— Eurozone finance ministers on Friday formally approved the terms of a problematic Cyprus debt rescue. The bailout for Cyprus marks an important shift in the eurozone crisis, with bank depositors paying out to help fund the rescue.

The rescue deal is worth $13 billion. Under the deal's terms, Cyprus will be responsible for raising the remaining billions in the rescue package.

This week, questions were raised over just how many billions that will be.

Initially the overall package was gauged at around $22 billion. But documents leaked to the media this week showed the overall price tag could be as high as $30 billion.  

On Friday, eurozone ministers meeting in Dublin formally approved the rescue deal, without raising their own contribution to the package.

The deal is now ready for approval by member states and the first tranche of the loan - cash badly needed in Cyprus - could be ready by the middle of next month.

International lenders have estimated that the economy of Cyprus will contract by nine percent this year and almost four percent the year after.

Olli Rehn, the EU monetary affairs commissioner, said Friday the economy could shrink by as much as 15 percent this year alone.

"We are revising the growth forecast and of course there is plenty of uncertainty about the exact trajectory of economic growth in Cyprus," he said.

He said EU structural funds aimed at boosting euro economies may be brought forward to help Cyprus.

Cyprus is implementing spending cuts and banking sector reform to try to raise the funds it needs. The banking sector in Cyprus is about eight times the size of the economy.

Bank depositors have been forced to make their own contribution to the bailout, with a tax on accounts containing more than $130,000.  

Portugal and Ireland were also on the agenda at the two-day meeting in Dublin.

Ireland received a bailout in 2010 and the following year Portugal received its own bailout worth just over $100 billion.

On Friday, the ministers agreed to extend the bailout loans by seven years.

Jeroen Dijsselbloem, the Dutch finance minister and Eurogroup president, spoke at a press conference early in the day.

"The ministers of the eurogroup would like to take a definite and positive decision on this extension of the maturities of the loans for seven years, pending the decision of the ECOFIN colleagues this afternoon," he said.

The eurozone is to contribute just under $12 billion to the Cyprus bailout. Just over $1 billion will come from the International Monetary Fund.

You May Like

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in pubic More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid