Wednesday

25th Jan 2017

Cyprus bailout only next year, Germany says

  • Cypriot leader Christofias (r) is in a hurry - the Germans less so (Photo: consilium.europa.eu)

Links with Russia and other "questions" regarding the Cypriot financial sector are likely to delay a bailout decision until 2013, the German finance minister has said.

"So far discussions between the troika and Cyprus have advanced very slowly. That is why we will probably be able to look deeper at the bailout request only in 2013," German finance minister Wolfgang Schaeuble told Welt am Sonntag on Sunday (11 November).

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He singled out the "relationship to foreign lenders, including Russia" as one of the issues that need to be "clarified."

Cyprus is seeking a bailout of up to €15 billion after its banks were hit hard by the Greek crisis.

But a leaked report from the German foreign intelligence service (BND) last week warned against giving German taxpayers' money to a country where Russian and Ukrainian oligarchs launder their money.

Nicosia already received a €2.5 billion bailout from Moscow after the 2008 financial crisis and for a while claimed it could do without EU help, hoping Russia would once again come to its aid.

Schaeuble refused to comment further on the money-laundering concerns, but said "all questions need to be clarified" in order to take "responsible decisions" which he can defend to the German public.

A Cypriot source told this website that neither the troika nor any other member state has officially requested information on the money laundering suspicions.

"We want a deal as soon as possible and we think it's possible to reach an agreement with the troika this week," the source said.

The Cypriot finance minister is to give a "state of play" on troika negotiations later on Monday when the eurogroup of finance ministers meets in Brussels.

But the Cypriot source added that "no decisions are expected" at the meeting.

A senior EU official briefing journalists in Brussels on Friday said Cypriot authorities are keen to have the bailout deal - which may involve painful public sector cuts and income tax hikes - in place before presidential elections in February next year.

EU should raise own taxes, says report

A group chaired by former Italian PM and EU commissioner Mario Monti says Brexit should be used to create EU-level levies to depend less on member states contributions, and to abolish member states rebates in the EU budget.

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