PRESIDENT Nicos Anastasiades said yesterday he was committed to implementing a bailout deal “up to the last iota”, as negotiations appeared to enter the final stretch.
Anastasiades, in Brussels to attend the EU and eurozone summits, reiterated that Cyprus was not asking for preferential treatment.
“I have assumed the post of president 15 days ago and I immediately started negotiations with the troika representatives,” Anastasiades told reporters. “We look forward to finding the best and fairest agreement.”
The Cypriot president said he was committed to implementing a bailout agreement "up to the very last iota," adding that “what we look forward to is not preferential but fair treatment.”
Cyprus’ case was not going to be discussed during the summit although some talks were expected on the sidelines.
An extraordinary Eurogroup meeting will discuss the island’s bailout today.
"No, we will not speak about Cyprus because the troika has not yet finished its work,” German Chancellor Angela Merkel said. “That's why it is important that apart from the growth questions we look towards the finance ministers who will speak about Cyprus, we will not do that here. It's completely impossible without a troika report."
Cyprus needs funds from the eurozone to recapitalise its banks and to finance the government over the next three years.
Without help, it would slide into default, risking the eurozone's credibility and threatening progress made last year in convincing investors that the bloc will not be overwhelmed by its debt problems.
Initial estimates on the size of the bailout have been some €17 billion, raising doubts whether the island would ever be able to pay back the money.
However, it has emerged that European officials were pushing for a lower bailout – closer to €10 billion
Officials told Reuters late on Tuesday that Cyprus may be able to raise money from a levy on deposits and other taxes.
"We have a known problem in Cyprus - we have a financial sector which is relatively large in comparison with the Cypriot economy," he said. "Any aid we give must be aid towards self-reliance, we must address the causes," German Finance Minister Wolfgang Schaeuble was quoted as saying by the Wall Street Journal.
Once the causes of the country's problems are addressed, compromise on the manner, speed and time frame of aid will be easier, he said.
Finnish Prime Minister Jyrki Katainen emphasised the need for Cyprus’ debt to be sustainable.
"We have to find a solution which makes it very clear that Cyprus will end up with debt sustainability and that we need the IMF there also,” he said yesterday. “The main issue is that the solution must be a kind which makes it very clear that Cyprus will end up with a debt-sustainable situation."
One way of reducing the island’s bailout and the size of the banking sector, was getting rid of the Cypriot banks’ Greek operations.
Officials were yesterday negotiating with Greek authorities on how this could be achieved.
Christophoros Pissarides, chairman of the island’s national economic policy council appeared optimistic that a deal would be struck soon.
“The prospects are good,” he said.
The basic idea was to turn the operations over to Greece, which would recapitalise them through its own bailout.
Pissarides suggested that this would shave off some €2.0 billion from Cyprus’ assistance.
Anastasiades in Brussels ahead of a Eurogroup meeting today