Cyprus Aid Deal Seen Ready for Parliaments After Dublin Meeting

Dutch Finance Minister Jeroen Dijsselbloem said a 10 billion-euro ($13 billion) rescue for Cyprus is now ready to be ratified by parliaments after euro-region officials assessed the accord in Dublin today.

“The agreement is fully in line with the parameters and key objectives set by the Eurogroup on March 25,” Dijsselbloem told journalists after the meeting in the Irish capital. “We consider that the necessary elements are now in place to launch the relevant national parliamentary procedures required for the formal approval.”

Dijsselbloem earlier dismissed questions of whether Cyprus would require as much as 6 billion euros more than the aid package agreed in Brussels last month. He said that the size of the program won’t change and Cyprus will be able to fill other funding gaps as it restructures its two largest banks.

“The program is going to be 10 billion, as agreed, and all the other elements of the program will be financed either from the bail-in of the banks or the privatization and other elements,” Dijsselbloem told reporters as he arrived to chair the meeting of finance ministers.

Cypriot President Nicos Anastasiades said in Cyprus today that he will write to EU President Herman Van Rompuy to seek “further aid,” in line with his nation’s needs.

Cypriot government spokesman Christos Stylianides said Anastasiades hasn’t requested more financial assistance and is discussing the possibility of increasing European structural funds. That followed comments from a separate government official that the president will seek to increase the size of the rescue package.

Crisis Bailouts

Cyprus is the fifth euro-zone country to tap international aid in Europe’s sovereign-debt crisis, which has entangled the finances of banks and nations in a mutually destructive spiral. The rescue talks roiled markets as Cypriot lawmakers rejected an initial plan that included a tax on insured bank deposits.

Anastasiades then agreed to a new accord on March 25, which closed the doors of Cyprus Popular Bank Pcl, the second-largest lender, and imposed losses on depositors with more than 100,000 euros.

The letters to EU authorities “will refer to the need for a change in the EU’s policy stance toward Cyprus with extension of further aid, in light of the critical moments we are going through as a result of the economic crisis and the measures that have been imposed on us,” Anastasiades told reporters in Nicosia earlier today.

Bank of Finland Deputy Governor Pentti Hakkarainen said in an interview on April 10 that Europe’s policy makers need to come up with a more predictable crisis-management rulebook after Cyprus’s bailout confused investors.

Joint Effort

Irish Finance Minister Michael Noonan said today that the Cyprus program is “appropriate” for conditions there, and involves smaller amounts of money than earlier rescues for Greece, Portugal and Ireland.

“The situation in Cyprus is pretty well resolved,” Noonan said.

The Cypriot rescue is a joint effort of the International Monetary Fund, the European Commission and the European Central Bank, the so-called troika that has handled euro-area bailouts.

(For more on the European debt crisis, see TOP CRIS.)
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