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Cyprus Closes In on International Bailout Deal, Christofias Says

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Nov. 23 (Bloomberg) -- Cypriot President Demetris Christofias said his government is working to strike an agreement on a bailout program it needs to recapitalize banks and pay its bills.

“We’re still working very hard,” Christofias told reporters during a European summit in Brussels late yesterday. In Nicosia earlier, Finance Minister Vassos Shiarly said Cyprus may need as much as 17.5 billion euros ($22.5 billion) of aid, almost the size of the country’s economy.

The ANA news agency reported that Cyprus had reached an agreement on emergency aid. A Cypriot official said on condition of anonymity that a deal is nearly complete and an announcement may come as soon as today.

Cyprus in late June became the fourth euro-area nation to request a financial rescue since a 2010 bailout of Greece. The bailout will encompass banks weakened by their exposure to the Greek economy as well as the public sector.

Talks between Cyprus and the so-called troika that oversees euro-area bailouts “are continuing, and we hope outstanding issues are settled soon,” Shiarly said yesterday.

The rescue will amount to about 6 billion euros to refinance state debt from 2013 to 2016 and 1.5 billion euros to cover fiscal deficits, Shiarly said, while as much as 10 billion euros may be required for the bank recapitalization.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net