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11 Feb 2013
Eurogroup to discuss Cyprus bailout
EU finance ministers are due meet today at noon in Brussels in order to discuss the bailout for Cyprus as well as situation in Greece and the framework for the direct recapitalization of EU banks. IMF head Christine Lagarde will also take part in the talks.
The FT reports that a confidential memorandum on the aid for Cyprus has been prepared and will be discussed by the Eurogroup today. It contains three propositions of how to avoid a full bailout for the country: “a ‘bail-in’ of investors and depositors, and drastic shrinking of the Cypriot banking sector”, a “bail-in” of “ junior debt holders, but not bank depositors”, as well as allowing “Cyprus to sell the shares it acquires in its ailing banks to the European Stability Mechanism.”
ECB executive board member Joerg Asmussen told the German newspaper Handelsblatt that he expects the aid package for Cyprus to be in place by the end of March.
As far as direct recapitalization of banks is concerned, the Eurogroup will try decide on a date from which the ESM will be able to intervene and on the maximum amount of money for each recapitalization.
This will be the first Eurogroup meeting chaired by Dutch Finance Minister Jeroen Dijsselbloem who takes over from the outgoing Jean-Claude Juncker.
The FT reports that a confidential memorandum on the aid for Cyprus has been prepared and will be discussed by the Eurogroup today. It contains three propositions of how to avoid a full bailout for the country: “a ‘bail-in’ of investors and depositors, and drastic shrinking of the Cypriot banking sector”, a “bail-in” of “ junior debt holders, but not bank depositors”, as well as allowing “Cyprus to sell the shares it acquires in its ailing banks to the European Stability Mechanism.”
ECB executive board member Joerg Asmussen told the German newspaper Handelsblatt that he expects the aid package for Cyprus to be in place by the end of March.
As far as direct recapitalization of banks is concerned, the Eurogroup will try decide on a date from which the ESM will be able to intervene and on the maximum amount of money for each recapitalization.
This will be the first Eurogroup meeting chaired by Dutch Finance Minister Jeroen Dijsselbloem who takes over from the outgoing Jean-Claude Juncker.