Brussels, 15/01/2013 (Agence Europe) - The recapitalisation of Cypriot banks should take account of the reality of Cypriot banking, and should come from the European Stability Mechanism, without its being a burden on the Cypriot state, said Cypriot President Demetris Christofias at a press conference at the European Parliament on Tuesday 15 January 2013. He said the capital needs were due to measures taken in relation to the Greek debt, the writedown of which has cost Cypriot banks five billion euros and therefore it would only be fair for the cash requirements for Cypriot banks to be provided without going through the goverment's budget. The details of exactly how any direct bank bailout could occur in the eurozone without plunging the country in question into further debt will be outlined in the first half of 2013.
Commenting on the measures recommended by the future troika of lenders to Cyprus (the European Commission, European Central Bank and International Monetary Fund), the president of the European Parliament (EP), Martin Schulz, said it was not right that the troika did not have to give any democratic account of itself, adding that the troika should come and justify its measures before the EP in order to avoid ordinary people getting the impression that they were governed by an “obscure power”. No deal has yet been struck on the aid plan requested by Cyprus. Christofias said this was because details were still being awaited on the amount of aid required. The bank finance requirement estimate by Pimco should be available on Friday and is expected to lie somewhere between seven and ten billion euro, and thus equate to 60% of Cypriot GDP. The European Commission forecasts that Cypriot debt will rise to 96.7% of GDP in 2013.
With regard to the accusations of money-laundering in Cyprus, Christofias said that everything that was humanly possible had been done to scotch the rumours, adding that the critics had been unable to provide any evidence of the claim, which Christofias said didn't stand up to any kind of scrutiny. There will be elections in Cyprus in Feburary, but Christofias will not be standing for re-election. Asked whether the loan agreement with the eurozone might be signed by his successor, he said that if the Eurogroup and the troika were ready to sign the Memorandum of Understanding on which agreement has finally been reached, then he would be ready too. If not, it would be the new government that would have to take over, but he himself was prepared to assume his responsibilities. (EL/transl.fl)