Revision of Cypriot bailout terms not likely: euro zone officials

Wed Jun 19, 2013 3:57am EDT
 
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BRUSSELS (Reuters) - The euro zone does not intend to change the terms of Cyprus's bailout as requested by Cypriot President Nicos Anastasiades in a letter sent to euro zone leaders and its lenders, three senior euro zone officials said on Wednesday.

Cyprus secured 10 billion euros in emergency loans from the euro zone's bailout fund in April to avoid bankruptcy. The deal involved the closure of the island's second biggest bank, Laiki, and a fundamental restructuring of Bank of Cyprus.

In the letter, which Reuters reported on June 11, Anastasiades did not explicitly ask for more money but indicated that the Cypriot economy could not cope unless the terms of the rescue package are altered.

"It is my humble submission that the bail-in was implemented without careful preparation," Anastasiades says in the letter, which the Financial Times and Wall Street Journal reported on Tuesday.

"The heavy burden placed on Cyprus by the restructuring of Greek debt was not taken into consideration when it was Cyprus's turn to seek help."

But EU officials said there was no intention to alter the terms of the loans agreed with Cyprus or to supply more funds. The sources suggested Anastasiades was aware no revision was likely, but wanted to send a message to a domestic audience.

Asked if the terms of the bailout could be changed, one senior EU policymaker said: "No, not as far as I can see."

Euro zone finance ministers will discuss the letter at a meeting in Luxembourg on Thursday.

A second official said: "There's no chance we'll revise the terms of the bailout, but we'll discuss it on Thursday."   Continued...

 
A depositor waits to enter a Laiki Bank branch in Nicosia March 28, 2013. REUTERS/Yannis Behrakis