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27.06.2013

Cyprus EU Stabilization Fund provided the first tranche of aid

The European Stability Mechanism / ESM - EU stabilization fund / translated Cyprus today 1 billion euros, completing the first tranche of aid provision in the amount of 3 billion euros. The first part in 2 billion euros was assigned to the Republic 13 May. This is stated in the message of the stabilization fund.

Dedicated funds should be used to meet the financial needs of the country, in particular the financing of debt maturity expires, the statement ECM.

The Cypriot government has agreed in late March with the "troika" of international lenders / European Commission, the European Central Bank and the International Monetary Fund / rescue plan for the country on the brink of an uncontrolled default. Anti-crisis program provides, inter alia, the provision of the republic credit assistance amounting 10 billion euros over three years, of which 9 billion euros by the EU, and 1 billion euros - the IMF.

Under the deal, Cyprus has a strict restructuring of the banking sector, including the elimination of the second-largest of the Cyprus National Bank to transfer its healthy assets and the largest system for the country's economy the Bank of Cyprus.

In turn, the government pledged to hold its recapitalization by raising funds forced the owners of uninsured deposits exceeding 100 thousand euros. "Haircut" deposits will lead to the loss of depositors of the Bank of Cyprus to 60 percent of their savings, and the People's Bank of Cyprus - to 100 percent.

Source: ITAR-TASS
Author: Alexey Berazhkou

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Tags: EU Economics Help