Cyprus obtains qualified support for bailout from Eurozone leaders

Cyprus obtains qualified support for bailout from Eurozone leaders
# 12 January 2013 02:20 (UTC +04:00)

Baku-APA. Cyprus obtained qualified support on Friday from Eurozone leaders in its efforts to push through a bailout agreement after several warnings from German lawmakers that the German parliament was not ready to endorse the deal, APA reports quoting Xinhua.

German Chancellor Angela Merkel, participating in a meeting of European People's Party (EPP) leaders in Cyprus' southern city of Limassol, said Cyprus deserved solidarity from the European Union but at the same time it has to pursue economic reforms.

"Cyprus must move forward with reforms of its economy but on the other hand we must show solidarity," said Merkel, who had earlier warned Cyprus not to expect special treatment by its Eurozone partners.

Even as she spoke, government spokesman Stefanos Stefanou said Cyprus had fully complied with conditions set by the troika - the European Commission, the European Central Bank and the International Monetary Fund - including enacting stricter legislations to fight money laundering.

"We have proven our will to do all it takes to overcome difficulties and this has been recognized by the most recent Eurogroup meeting," Stefanou added.

He also said Cyprus did not asked for special favors.

"We only ask for justice, given the fact that Cyprus is the victim of a European decision for a haircut to the Greek debt," he said.

The Greek debt write-down cost Cyprus banks an estimated loss of 4.5 billion euros (about 6 billion U.S. dollars) and forced them to apply for state support to recapitalize.

The Cypriot government says that it was forced to apply for bailout because of the recapitalization needs for the banks, estimated at 10 billion euros, although it is negotiating an additional amount of 7.5 billion euros for budget financing and paying back the sovereign debts up to the end of 2015.

Further support for Cyprus came from Greece, and also Finland, another country that had expressed reservations over the Cyprus bailout.

Greek Prime Minister Antonis Samaras, who has just clinched a bailout deal of about 40 billion euros, said he was confident Cyprus would make it as Greece did.

Finland's Prime Minister Jyrki Katainen told journalists that his country was ready to support the Cyprus bailout given a stronger leadership by the next government of the eastern Mediterranean island to meet challenges ahead.

His remark was a clear signal of support for main opposition Democratic Rally party leader Nicos Anastasiades, the host of the EPP meeting, who is shown by polls to be almost a certain winner of a presidential election in mid-February.

"The challenges facing Cyprus are really huge, but I am confident that if and when the country can get a new strong and committed leadership capable of strengthening confidence, it will have a positive impact," Katainen said.

Merkel had also earlier wished Anastasiades to win the election, adding that the presence of EPP leaders in Cyprus was aimed at giving a strong message of support.

Anastasiades himself said Cyprus could count on the support of EPP parties, which lead the majority of European governments and control the majority in the European Parliament.

He added that he gave EPP leaders a strong assurance that Cyprus would comply with all its obligations resulting from the bailout deal with the troika.

Anastasiades also said he assured his EPP colleagues that allegations about Cyprus being a tax haven and a place for easy money laundering were unfounded and exaggerated.

"I handed them documents which show that Cyprus is fully complying with its international obligations," he added.

Cyprus's provisional bailout deal is not expected to be examined by the Eurogroup before the end of January pending establishment of the recapitalization amount by special auditors, leaving the government to take office at the end of February almost insolvent.

EPP is the largest and most influential European-level political party of the center-right. It currently includes 74 member-parties from 40 countries, as well as the presidents of the European Commission and the European Council.

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