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Eurozone

France and Germany urge rapid Cyprus bailout talks

The governments of France and Germany have called on the newly elected leaders of Cyprus to speed up talks on the eurozone member's sovereign bailout. But some obstacles will still have to be removed.

In a joint statement on Monday, the finance ministers of France and Germany called for greater effort by Cyprus to accelerate an agreement on a rescue package for the debt-stricken eurozone member country.

"Discussions should resume shortly with a view to reach a deal before the end of March," the statement said, with the ministers stressing the need for a significant fiscal and structural adjustment in Cyprus.

Parisand Berlin expressed the hope that Sunday's election results in Cyprus would be beneficial to removing any remaining obstacles on the way to a bailout deal.

Low creditworthiness?

"We welcome the result of the Cypriot elections which will allow the formation of a government that will quickly continue with the negotiations abut a financial assistance program for Cyprus," the joint statement added.

Nonetheless, Cypriot President-Elect Nicos Anastasiades is expected to face weeks of difficult talks with foreign lenders on a possible rescue deal. The country is estimated to need up to 17 billion euros ($22 billion) in foreign aid which is about the size of its entire economy.

The 66-year-old Anastasiades will still have to overcome German fears that Cyprus is a hub for Russian money laundering and wider eurozone worries that the country might never be able to pay back its debt.

hg /rc (AP, AFP, Reuters)