Brussels, 01/03/2013 (Agence Europe) - No significant progress in the negotiations on Cyprus's financial bailout is expected during the Eurogroup meeting on Monday 4 March, the government having just been elected.
The new minister for finance, Michalis Sarris, has already said that he could not guarantee any agreement will be reached on the aid plan in March, reports Dow Jones. This timetable, however, appears to be the one preferred by the EU17 and the European Commission, which continues to believe that March will be a decisive turning point. The austerity measures that have to be implemented by Cyprus to satisfy its lenders have already been approved by parliament and included in the 2013 budget.
The biggest bone of contention between the different parties is the possible contribution by savers towards making Cypriot debt viable. On this point, Cypriot Prime Minister Nicos Anastasiades and Sarris share the line advocated by the previous government, “Such an issue isn't even up for discussion”. One European source also said on Thursday that there were few reasons to get worked up about these kinds of deposits. According Die Welt, a Commission document has highlighted the dangers linked to such a possibility transpiring. Another option included in this document consists of allowing Cyprus to sell off the shares that it acquired during the banking bailout through the European Stability Mechanism, once the direct recapitalisation instrument is operational. Cyprus is arguing in favour of this option (see EUROPE 10765). (EL/transl.fl)