Cyprus News | RoC Bailout Not Available Until Next Year

Oh dear, it looks as if the RoC have prevaricated too often and too long. If the German Finance Minister is correct, the money they need will not be available to them until 2013. Whilst that may be just around the corner, can they survive that long? Mr Christofias promised to put the RoC on the map when he took up the rotating presidency of the EU, although I am quite sure this is not the way he had in mind.

German minister drops Cyprus bombshell

By George Psyllides Published on November 1, 2012

“GERMAN Finance Minister Wolfgang Schaeuble said yesterday he did not expect concrete negotiations between Cyprus and international lenders to start before 2013, suggesting that the island has missed a November 12 deadline and could be at risk of running out of money before the end of the year.

Speaking at a news conference in Berlin after a telephone conference with his eurozone counterparts, Schaeuble said there had not yet been any concrete negotiations with Cyprus on financial assistance and he did not expect them to commence until 2013.

The unexpected comment flies in the face of everything the government has been stating publicly about the extent of progress in the negotiations and the expected return of the troika. It was quick to respond yesterday, repeating that it was having substantive discussions with the lenders but could not say however whether Cyprus would meet the November 12 deadline.

Cyprus sought financial aid from the European Union and the International Monetary Fund in June but the government has still not concluded a bailout deal with lenders despite repeatedly emphasising that it must be done before the November 12 Eurogroup meeting.

After November 12, it will take the parliaments of individual eurozone nations about six weeks to sanction the Cyprus memorandum.

Government spokesman Stefanos Stefanou said he did not know what the German minister meant and did not wish to interpret the statement.

“What I can say with certainty is that we have been in consultation with the EU and the troika for some time now and we expect a date to be set for the arrival of the troika to negotiate with the aim of concluding on a memorandum. This is called substantive discussion,” he said.

Stefanou could not say if Cyprus would miss the deadline.

“This is a matter which will be answered when the troika comes to Cyprus and when we start the negotiations,” the spokesman said.

The government appears eager to conclude a deal, faced with the danger of running out of cash by December and being unable to pay the public wage bill.

Missing the November 12 Eurogroup meeting could also mean that Cyprus may be “butchered” if international lenders deal with the country in isolation.

The government spokesman suggested there were alternative scenarios, like the regular Eurogroup on December 17.

“But we are always working on being able to conclude as soon as possible because from the moment there is uncertainty it affects the market in general,” Stefanou said.

He added that the expectation was for the troika to arrive on the island next week.

No specific date has been set however. When Cyprus applied for the bailout at the end of June, the troika visited the island within weeks and submitted a series of proposals to the government on July 25.

The government rejected the proposals and spent months coming up with their own, ones they said would “protect the workers” by not axing wage indexation or CoLA and 13th salaries, but which focused on extensive extra taxation.

The counter proposals were given to the troika over a week ago.

President Demetris Christofias yesterday briefed socialist EDEK leader and House President Yiannakis Omirou on the developments.

Omirou, asked about the German Finance Ministers comment, said Schaeuble may have been misinformed on the situation. If there was more to it, then Cyprus could be in serious trouble, he said.

The president is scheduled to see other party leaders today. It has long been suspected that Christofias, despite his assertions to the contrary, does not want to be the one to sign a troika-compiled bailout, and is attempting to stall until the February presidential elections when he will be out of office.

Moscow meanwhile reiterated yesterday that any financial assistance to Cyprus must be done through the EU.

Cyprus applied to Russia for a €5.0 billion loan on top of €2.5 billion it borrowed in 2011.

“Our Finance Ministry is considering this application. We don’t have special funds to support the European economy, but we’re willing to consider such an application. And of course it must be done in cooperation with the European Union. I don’t think in the current difficult conditions these kinds of problems can be solved on a bilateral basis,” First Deputy Prime Minister Igor Shuvalov said in an interview with Euronews.”

Is the ROC up the creek without a paddle, or even a bucket to bail them out?

Anon

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