Brussels, 26/06/2013 (Agence Europe) - The head of the Eurogroup, Jeroen Dijsselbloem, is urging the Cypriot government to dissipate any doubts about implementation of the aid programme.
Thnose close to Dijsselbloem have said that, on Tuesday 25 June, he sent a letter to the president of Cyprus, Nicos Anastasiades, in which he says that the “situation in Cyprus is such that it allows neither complacency nor delay in addressing the pressing issues in the financial sector. Eurogroup concurs that the Bank of Cyprus needs to be brought out of resolution as quickly as possible, and that Cypriot businesses' unencumbered access to their working capital must be restored” (see EUROPE 10872). Cash-flow is currently hindered by the restrictions on the movement of capital and the freezing of a significant proportion of deposits of over €100,000 while awaiting the results of the KPMG audit.
Along with the 37.5% of bank deposits already converted into the bank's capital, a further 22.5% is likely to be raided by banks, although this percentage may be reduced somewhat. In his letter to the Cypriot government, Dijsselbloem says it is “better to avoid speculation about the Cypriot commitment to stick to the MoU and deliver.” Two weeks ago, Anastasiades urged his partners to find a solution to the Cypriot banks' cash-flow problems, but Europe interpreted this as a questioning of the agreements reached in March. On Wednesday evening, the day before the European Summit, Anastasiades is due to meet with the president of the European Council, Herman Van Rompuy. (EL/transl.fl)