07/12/2012 10:48
Finance Minister, Vassos Shiarly stated on Friday that public debt might reach 140% of GDP and called on the legislative power to pass the 24 bills currently discussed by the House Finance Committee without amendments.
According to Mr. Shiarly, if the preliminary number for recapitalization is €10 billion, probably the island’s public debt will increase to 140% of GDP in 2014.
The debt now stands at 85% of GDP and includes the support of Cyprus Popular Bank of €1.8 billion.
He also said that probably by the end of the memorandum program, namely in 2016, the debt will fall to 120% of GDP, while in case of privatizations, the amount will drop below 110% of GDP.
Talks about debt sustainability will be made at the Eurogroup on December 13. “Cyprus is more likely to convince them, if all bills are approved by the Parliament”, he said.
Mr. Shiarly also suggested that the application of Cyprus is at a critical stage and all can be overturned if we are not careful.
According to the Minister, if the bills are approved by the House, Cyprus’s position in next week’s Eurogroup will be strengthened.
"Tough times are underway, not only on December 13 but also the days that will follow”, he added.
He also noted that it’s not the preliminary agreement that should be taken for granted but the final, stressing that the path of the memorandum is long and difficult.
He referred to the course of action of some countries; “At the Eurogroup, Cyprus will have the troika on its side”.
The Minister reiterated the need to vote for the bills, “since one of the dangers posed by the Eurogroup is the degree of implementation of the program”.
“In our case, this has disappeared. Cyprus seeks to reduce the risk of implementation”, he added.
The Minister urged the Parliament not to amend the bills.
"It's time to avert the danger of destruction." However, he told the MPs that if they find any errors in the number and rationale of the bills, they can be amended.
“Most laws concern the period 2013-2014. There is room later with documented evidence, Cyprus to go to the troika”.
According to Mr. Shiarly, Pimco is expected to announce tonight the initial amount needed for the recapitalization of the banks. “The total island’s needs together with the refinancing of the existing liabilities stand at €7.5 billion, excluding the Russian loan”.
The final number for the banks will be announced in mid January. “In the case of Spain, it was originally estimated that it will need €100 billion but the final number declined to €37 billion”, he stressed.
He reiterated that they have come about with the troika on the interest rate of the loan, which will stand at 2.5%.
In relation to the terms of the loan agreement, Mr. Shiarly noted that contracts differ for every country in the Memorandum.
“The preliminary agreement was reached on Thursday and on Friday we had contacts with the ESM”, he said.
Mr. Shiarly reserved to inform the Parliament on the final terms of the loan contract next week.
According to Mr. Shiarly, if the preliminary number for recapitalization is €10 billion, probably the island’s public debt will increase to 140% of GDP in 2014.
The debt now stands at 85% of GDP and includes the support of Cyprus Popular Bank of €1.8 billion.
He also said that probably by the end of the memorandum program, namely in 2016, the debt will fall to 120% of GDP, while in case of privatizations, the amount will drop below 110% of GDP.
Talks about debt sustainability will be made at the Eurogroup on December 13. “Cyprus is more likely to convince them, if all bills are approved by the Parliament”, he said.
Mr. Shiarly also suggested that the application of Cyprus is at a critical stage and all can be overturned if we are not careful.
According to the Minister, if the bills are approved by the House, Cyprus’s position in next week’s Eurogroup will be strengthened.
"Tough times are underway, not only on December 13 but also the days that will follow”, he added.
He also noted that it’s not the preliminary agreement that should be taken for granted but the final, stressing that the path of the memorandum is long and difficult.
He referred to the course of action of some countries; “At the Eurogroup, Cyprus will have the troika on its side”.
The Minister reiterated the need to vote for the bills, “since one of the dangers posed by the Eurogroup is the degree of implementation of the program”.
“In our case, this has disappeared. Cyprus seeks to reduce the risk of implementation”, he added.
The Minister urged the Parliament not to amend the bills.
"It's time to avert the danger of destruction." However, he told the MPs that if they find any errors in the number and rationale of the bills, they can be amended.
“Most laws concern the period 2013-2014. There is room later with documented evidence, Cyprus to go to the troika”.
According to Mr. Shiarly, Pimco is expected to announce tonight the initial amount needed for the recapitalization of the banks. “The total island’s needs together with the refinancing of the existing liabilities stand at €7.5 billion, excluding the Russian loan”.
The final number for the banks will be announced in mid January. “In the case of Spain, it was originally estimated that it will need €100 billion but the final number declined to €37 billion”, he stressed.
He reiterated that they have come about with the troika on the interest rate of the loan, which will stand at 2.5%.
In relation to the terms of the loan agreement, Mr. Shiarly noted that contracts differ for every country in the Memorandum.
“The preliminary agreement was reached on Thursday and on Friday we had contacts with the ESM”, he said.
Mr. Shiarly reserved to inform the Parliament on the final terms of the loan contract next week.
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