Brussels, 12/09/2013 (Agence Europe) - The European Commission will soon unveil a draft amendment to the EU budget for 2014 to take account of the tough situation in Cyprus, as requested by EU heads of state and/or government in June.
A Cypriot diplomatic source said that €200 million for Cyprus would be released from the EU cohesion fund for 2014 and 2015. The Commission says that it is still working on financing for the amendment. Impossible to say at this stage whether it will be new aid or simply early payment of cash already earmarked for the country.
The Commission is expected to set up a 12-man task force for Cyprus, with 9 members of staff in Brussels and 3 in Nicosia, said the diplomatic source, in order to help the island with the reform process. The Cypriot economy is expected to contract by 8.7% this year because of restructuring of the island's banks.
The bank restructuring has led to new restrictions on the movement of capital. The restrictions did not prevent the loss of more than €10 billion, but a Cypriot Finance Ministry roadmap plans for their gradual lifting. The source said the phase-out should be complete within two years.
Financial aid. Nicosia will receive €1.5 billion from the European stability mechanism (ESM) on 27 September and approval is expected any time soon for €86 million of aid from the International Monetary Fund, said a European source on Thursday 12 September, the day before a Eurogroup meeting, adding that there was nothing standing in the way of the decision being made on 27 September. (EL and MB/transl.fl)