EU and IMF say they′re ready to rescue Cyprus | News | DW | 27.06.2012
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EU and IMF say they're ready to rescue Cyprus

Eurozone finance ministers have said they are prepared to provide Cyprus with emergency loans, as has Christine Lagarde of the International Monetary Fund. Cyprus filed its initial request on Monday.

The Eurogroup, the name given to the 17 finance minister from countries using the euro, held a conference call on Wednesday in the run-up to Thursday's EU leaders' summit, saying afterwards that the bloc was ready to provide Cyprus with the emergency loans it had requested earlier in the week.

"The Eurogroup acknowledges that an adjustment program seems warranted at this stage and considers responding favorably to it," the ministers said in a joint statement issued after the discussions. "The Eurogroup also welcomes the request of Cyprus for international assistance from the IMF."

When the initial request was filed on Monday, it was not immediately clear whether Cyprus would seek lower-interest loans just from its single currency partners or also from the International Monetary Fund.

Cyprus' request made it the fifth eurozone country to ask for some kind of financial aid, commonly referred to as a "bailout." Greece, Ireland and then Portugal requested low-interest loans at the governmental level over the past two years, while Spain sought help only for its troubled banks earlier this month.

It's not yet known what kind of assistance Cyprus has requested, or what it will be granted. The matter is liable to be a key topic of discussion at Thursday's EU summit in Brussels.

Lagarde's IMF also at the ready

Across the Atlantic in Washington, IMF Managing Director Christine Lagarde also issued a statement confirming that her organization had "received an invitation from the Cypriot government" to contribute to the emergency loans package.

"We stand ready to join the efforts of our European partners to help Cyprus return to stable and sustainable economic growth and restore a solid financial sector," Lagarde's statement said. "We expect to send an IMF team to Cyprus to evaluate the situation in the field as soon as possible in preparation for discussions on an economic program that will help Cyprus meet the economic challenges it is facing."

The Cypriot government has not said how much money it would be seeking, saying in its Monday statement only that the request was primarily prompted by "negative spillover effects through its financial sector, due to its large exposure in the Greek economy."

Owing to the island's size, any Cypriot rescue package is liable to be by far the smallest provided so far by eurozone countries and the IMF.

msh/sej (AFP, AP, dpa)