الجمعة، 23 نوفمبر 2012

Cyprus and Lenders Agree on a Bailout Package, Government Says

NICOSIA — Cyprus has agreed on a bailout package with the European Union and International Monetary Fund and expects the lenders to confirm the deal later on Friday, a government spokesman said.

If confirmed by the lenders, Cyprus will become the fourth euro zone country to request a sovereign rescue. The Mediterranean island sought financial aid — which could be up to €17.5 billion, or $ 22.6 billion, equivalent to its entire annual economic output — in June, after its banks were battered by their exposure to the Greek crisis.

The government spokesman did not put a figure on the bailout sum, saying it would depend on a report early in December that will establish how much money Cyprus will need to recapitalize its banks.

“The deadline that was set by the European Central Bank for the recapitalization of the banks expired, so we had to enter the rescue mechanism,” the spokesman, Stefanos Stefanou told reporters Friday.

The government has already briefed union representatives on the terms of the deal and will brief political leaders soon, Mr. Stefanou said.

“The bailout deal includes unpleasant measures,” he said without elaborating.

But the island’s public sector workers already voiced their opposition to the deal. “These measures are unjust, they will be a massacre,” said Glafkos Hatzipetrou, a senior official with the Pasidy public sector union, after being briefed.

Cyprus and the three international lenders known as the troika — the European Union, the I.M.F. and the European Central Bank — have been at odds over a host of issues, including privatizations and pension cuts, as well as the amount needed to recapitalize the banks.

An analysis on the state of Cypriot banks is expected by Dec. 3, when euro zone finance ministers meet again in Brussels with the aim of agreeing on an economic program for the country.

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