Rocked by news that he needs to find a way to generate another 6 billion euros ($7.8 billion) on top of 7 billion euros ($9.19) to trigger an international bailout, Cypriot President Nicos Anastasiades said he’s going to ask the European Union for more help.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB), who are Greece’s saviors as well, is putting up Cyprus’ rescue package but forced the government to come up with 7 billion euros ($9.19) by confiscating up to 80 percent of bank accounts over 100,000 euros ($130,000).
But this week a report from the Troika said that Cyprus will need to find some way to come up with another 6 billion euros ($7.8 billion) by selling its gold reserves and a debt swap to impose more losses on investors. Now Anastasiades says Cyprus needs more than the combined 23 billion euros ($30.2 billion), but didn’t specify what form it could be.
He said he would send letters to EU Commission President Jose Manuel Barroso and EU Council chief Herman Van Rompuy telling them of the “need for a change of EU policy” toward Cyprus by offering additional assistance.
That came as Eurozone finance ministers were set to meet in Dublin to talk about the crises on Cyprus and in Greece, where Troika envoys are negotiating more reforms with the government there.
“The letter to Mr. Barroso and Mr Rompuy will refer to the need for EU policy to change towards 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 said, the BBC reported. The finance minister of Luxembourg, Luc Frieden, said that, “‘I believe the policy will be that the volume will remain at 10 billion (euros).”
Government spokesman Christos Stylianides told a news conference that Cyprus’ crisis was the fault of Anastasiades’ predecessor, Dimitris Christofias, a Communist, who never came to terms on a bailout as it was reported he didn’t want to blamed for austerity measures. He did not run again. Sylianides said Christofias failed to “take responsibility, and complete indecisiveness.”
Jonathan Loynes, chief European economist at Capital Economics, told the BBC that Cyprus may have to seize even more from bank accounts although the government has said it wouldn’t go after guaranteed deposits under 100,000 euros.