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

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants 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.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs