Cyprus bailout quagmire
February 25, 2013
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)