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

WHO: Anti-Ebola Efforts Should Focus on West Africa

Official says WHO is 'reasonably confident' countries bordering those hardest hit by the Ebola outbreak are not seeing the virus crossing their borders More

South Sudan Crisis Threatens Development

Economic costs and lost development opportunities in South Sudan have erased what little progress the country has made since independence in 2011 More

Ukrainian PM Warns: Russia May Try to Disrupt Sunday Poll

Arseniy Yatsenyuk orders full security mobilization for parliamentary election to prevent ‘terrorist acts’ from being carried out 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.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid