Financial News

  • 25 November 2012, 13:05

Eurozone Crisis: Cyprus Poised For Bailout

Discussions between Cyprus and European officials are ongoing, as the island negotiates the terms of a sovereign bailout.

Cyprus government officials said they had agreed on a package with the European Union (EU) and International Monetary Fund (IMF).

Butáthe European Commission (EC) denied that a deal had been struck, adding that discussionsáare ongoing.

"Discussions are expected to continue from respectiveáheadquarters with a view to making further progress toward aápotential program," a a joint statement from the EU, IMF and EC said.

If the deal is approved, it would make the Mediterraneanáisland the fourth country in theáeurozoneáto request a sovereign bailout, as the region struggles to contain its debt crisis.á

Cyprus requested a bailout - which could be worth as much as ú17.5bn, or its total GDP - after its banks failed to cope with their exposure to Greece.

"The deadline that was set by the European Central Bank foráthe recapitalisation of the banks expired, so we had to enteráthe rescue mechanism," spokesman Stefanos Stefanouásaid.

"The bailout deal includes unpleasant measures."

Greece, Ireland and Portugal have already received bailouts to help manage their debt levels, while Spain received a 100bn euroá(ú80.8bn) aid package to bolster its banking industry.