21/02/2013 06:12
European officials are asking for the acceleration of the negotiations for the Cypriot memorandum, considering Cyprus a potential threat to the peace that the eurozone seems to be in.
Head of the working group of Eurogroup, Thomas Wieser, stated yesterday that Cyprus must receive international support before the end of March, but still it is not certain how the structure of the loan assistance will be.
Although the details of the memorandum have not yet been decided, he believes that the Cypriot debt could become sustainable without restructuring or haircut of deposits, he told Reuters yesterday.
Mr. Wieser said that he still believes that the second half of March, probably towards the end of the second fortnight would be easily possible to make a decision on Cyprus, speaking on the sidelines of a conference in the Slovak capital Bratislava.
Mr. Wieser also said that the stimulus package should aim at fiscal discipline, structural reforms, the strengthening the competitiveness of the economy, large-scale privatization and the shrinkage of the banking sector, which is five to eight times the size of the Gross Domestic Product.
When asked about the possible sale of Cypriot banks in Russia, Mr. Wieser said there were no discussions on this issue. However, he wondered whether this is feasible to note that “it is a probability”.
If the owners of a Cypriot bank receive an offer, I am sure that they will examine it carefully, he said.
The European technocrats seem to worry about the possibility of contagion of the Cyprus crisis in the rest of the eurozone, which gradually began to recover from the high uncertainty of last year.
Head of the European Stability Mechanism, Klaus Regling stressed the need yesterday to take a decision on the issue soon.
In his statements to Le Figaro, broadcasted by international news agencies, Mr. Regling stressed that “markets are looking at Cyprus closely. In case of a slippage, there is a risk of contagion”.
The statements of the European technocrats follow yesterday’s remark by Standard and Poor’s that the default risk of Cyprus has been increased.
The agency urged the European authorities to take action “to prevent a demonstration effect that could, for example, reverse the recent stabilization of deposits in other periphery countries”.
Similar remarks were made few days ago by Moody’s.
However, there is still no commitment for the finalization of the Cypriot memorandum in March.
The issue might be discussed on March 4, few days after the presidential election but no decision is expected to be taken.
The German government said a few days ago that the eurozone should not hurry on Cyprus before the structural reforms and the interconnection of the Cypriot banking system with the Greek are clarified.
If the European partners of Cyprus deem it necessary to finalize the loan agreement in March, Eurogroup will hold an extraordinary meeting in late March.
Head of the working group of Eurogroup, Thomas Wieser, stated yesterday that Cyprus must receive international support before the end of March, but still it is not certain how the structure of the loan assistance will be.
Although the details of the memorandum have not yet been decided, he believes that the Cypriot debt could become sustainable without restructuring or haircut of deposits, he told Reuters yesterday.
Mr. Wieser said that he still believes that the second half of March, probably towards the end of the second fortnight would be easily possible to make a decision on Cyprus, speaking on the sidelines of a conference in the Slovak capital Bratislava.
Mr. Wieser also said that the stimulus package should aim at fiscal discipline, structural reforms, the strengthening the competitiveness of the economy, large-scale privatization and the shrinkage of the banking sector, which is five to eight times the size of the Gross Domestic Product.
When asked about the possible sale of Cypriot banks in Russia, Mr. Wieser said there were no discussions on this issue. However, he wondered whether this is feasible to note that “it is a probability”.
If the owners of a Cypriot bank receive an offer, I am sure that they will examine it carefully, he said.
The European technocrats seem to worry about the possibility of contagion of the Cyprus crisis in the rest of the eurozone, which gradually began to recover from the high uncertainty of last year.
Head of the European Stability Mechanism, Klaus Regling stressed the need yesterday to take a decision on the issue soon.
In his statements to Le Figaro, broadcasted by international news agencies, Mr. Regling stressed that “markets are looking at Cyprus closely. In case of a slippage, there is a risk of contagion”.
The statements of the European technocrats follow yesterday’s remark by Standard and Poor’s that the default risk of Cyprus has been increased.
The agency urged the European authorities to take action “to prevent a demonstration effect that could, for example, reverse the recent stabilization of deposits in other periphery countries”.
Similar remarks were made few days ago by Moody’s.
However, there is still no commitment for the finalization of the Cypriot memorandum in March.
The issue might be discussed on March 4, few days after the presidential election but no decision is expected to be taken.
The German government said a few days ago that the eurozone should not hurry on Cyprus before the structural reforms and the interconnection of the Cypriot banking system with the Greek are clarified.
If the European partners of Cyprus deem it necessary to finalize the loan agreement in March, Eurogroup will hold an extraordinary meeting in late March.
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