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Cyprus president announces conclusion of bailout agreement

23 November 2012 17:40 (UTC +04:00)

Baku-APA. Cyprus and international lenders concluded a bailout agreement, the country's president said in an official statement on Friday, APA reports quoting Xinhua.

"It is announced that the Republic of Cyprus and representatives of the European Commission, European Central Bank and International Monetary Fund - collectively known as the troika- reached a convergence on the proposals which will formulate the loan memorandum between Cyprus and the European Stability Mechanism (ESM)," Demetris Christofias said in his statement.

Cyprus applied for EU Stability Mechanism financial support after the country's two largest banks asked for state support to replenish their core Tier 1 capital that was wiped-out by their exposure to the Greek debt.

Christofias' statement said that the full amount that will be needed for the recapitalization of financial institutions is expected to be announced at the beginning of December, based on the interim report by a specialized firm assigned to prepare an independent report on the recapitalization needs of the financial sector.

"This development allows for the further advance of the process, so as to secure the approval of a Memorandum of Understanding from the Eurogroup in December," said Christofias.

Further approval will be needed by competent authorities and parliaments of the eurozone member states.

"After that part of the process is completed, which is expected to be towards the end of January 2013, the Republic of Cyprus will be able to draw from the ESM the liquidity that is needed to help the Cypriot economy overcome the problems that it's currently facing," Christofias' statement said.

He added that he will soon make an address to the people on the issue of the bailout deal, expected to have the support of opposition parties.

Government ministers who have been engaged in negotiations with the troika began briefing trade union officials and party leaders on Friday, ahead of the official announcement on the conclusion of the bailout deal.