Cypriot president to ask EU for ‘extra assistance’

AFP and Reuters, NICOSIA

Sat, Apr 13, 2013 - Page 15

Cypriot President Nicos Anastasiades yesterday said he would appeal to EU chiefs for extra assistance for the island as it faces ever more crippling terms for a eurozone debt bailout.

Anastasiades said he had already spoken to EU Commissioner for Economic and Monetary Affairs Olli Rehn ahead of a key meeting of eurozone finance ministers in Dublin later yesterday that was due to finalize the bailout terms.

He said he would also write to European Commission President Jose Manuel Barroso and to EU President Herman Van Rompuy.

“The letter to Mr Barroso and Mr Rompuy will refer to the need for EU policy to change toward Cyprus by giving it extra assistance, given the critical times we are going through as a result of the economic crisis and the measures imposed on us,” Anastasiades told reporters.

He did not elaborate on what additional support he was seeking.

Under the preliminary bailout terms agreed with international creditors last month, Cyprus was already drastically downsizing its once lucrative banking sector, raising taxes, reducing the public sector workforce and privatizing state-owned utilities to raise 7 billion euros (US$9.1 billion).

However, the government acknowledged on Thursday that the costs have now soared to 23 billion euros and that the EU, the European Central Bank and the IMF are demanding that Cyprus fund the 6 billion euro shortfall too.

Meanwhile, Cyprus said on Thursday a sale of its gold reserves was among the optiothean international bailout, but ultimate responsibility rested with its central bank.

The Mediterranean nation, which is in line to receive 10 billion euros in aid, also partly eased capital controls imposed last month to prevent a bank run as it tries to boost business activity in its ailing economy.

Cyprus has to sell some of its gold reserves to raise about 400 million euros to finance its part of the bailout, an assessment of Cypriot financing needs prepared by the European Commission showed.

The document, seen by Reuters on Wednesday, said there had been a commitment from Cypriot authorities to this effect.

“The Cypriot government put various options forward, including this,” government spokesman Christos Stylianides told a news briefing on Thursday.

“In its consultations on drafting the memorandum of understanding the Cypriot government included such options so we could have the possibility of meeting financing requirements,” he said, adding that the gold sale was “one of many” options.