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Cyprus reports progress in talks with int'l lenders on bailout
[November 09, 2012]

Cyprus reports progress in talks with int'l lenders on bailout

NICOSIA, Nov 09, 2012 (Xinhua via COMTEX) -- Cyprus on Friday reported progress in negotiations with potential lenders from the European Union (EU) and the International Monetary Fund (IMF) on financial aid, but warned that there is still much to be done.

"It is our joint view that there has been progress in negotiations with the troika," said government spokesman Stefanos Stefanou after a long meeting of a ministerial committee with the troika negotiators representing the European Commission, the European Central Bank and the IMF.

The troika negotiators arrived at the finance ministry early Friday for talks on fiscal issues. Late in the day, they had an unscheduled meeting with the government's negotiating team, which is comprised of a group of ministers. The meeting lasted many hours into the night.

"We took stock of what has been discussed in tele-negotiations and there was a joint conclusion that there has been movement forward," Stefanou said.

But Stefanou said there is still a lot of ground to be covered during the coming days to consolidate progress achieved during teleconference negotiations over the last three months.

There is still a difficult task ahead before a deal is concluded, he said.

Cyprus requested financial assistance from the EU and the IMF to recapitalize its two largest banks battered by their exposure to the Greek crisis and meet salary needs until the end of the year.

The recapitalization need is the thorniest in all the unresolved issues and will be taken up by the troika negotiators who will confer on Saturday with the governor of the Central Bank of Cyprus and his team.

Cyprus hopes the European Stability Mechanism (ESM) still in the making by the Eurogroup will recapitalize the banks directly so as to avoid a further burden on its sovereign debt, which is now at 84 percent of its 17.9-billion-euro (22.8-billion-U.S.

dollar) GDP.

A government source hinted that the troika negotiators may leave after concluding this round of negotiations next week and come back later.

"Obviously the current round of negotiations with the troika is not likely to lead to a final bailout agreement," said the source on condition of anonymity.

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