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                          Cyprus Bailout Moves Forward

   by VOA News

   European Union finance ministers are pushing ahead with plans to bail
   out Cyprus and stabilize Europe's banking sector.

   Ministers meeting in Dublin, Ireland Friday faced questions following
   reports that the cost of the Cyprus bailout had jumped by several
   billion dollars. But EU Monetary Affairs Commissioner Olli Rehn said
   such worries were not justified.

   "People have been comparing apples and pears and coming up with
   oranges. I will refrain from remarking that this is what happens when
   stories are written based on leaked documents,'' Rehn said.

   The $13 billion bailout plan calls for Cyprus to contribute about $9
   billion. But the costs may still grow. Rehn confirmed Friday the
   economic fortunes of the offshore tax haven are worse than first
   thought.


   "We are revising the growth forecast and of course there is plenty of
   uncertainty about the exact trajectory of economic growth in Cyprus,''
   Rehn said.

   Before the meeting, Cypriot Finance Minister Harris Georgiades was
   resolute.

   "We have a deal and we shall make it work,'' Georgiades said.

   The bailout deal Cyprus patched together with international lenders
   must still be approved by the parliaments of several EU countries
   before aid can start flowing, as early as next month.

   Also Friday, the ministers agreed on the creation of a single
   supervisory mechanism to watch over European banks.

   Rehn said the move will "further enforce financial stability."

   To help ease the financial crunch, Cypriot officials say they are
   looking at other types of aid, some from the EU. But to raise
   additional money, the island could be forced to sell about
   three-fourths of its gold reserves for about $524 million, levy
   additional taxes and sell state assets.

   The terms of the bailout have already required Cyprus to confiscate 60
   percent of the deposits of its biggest account holders, many of them
   wealthy Russians.

   Cyprus is the fifth of the 17 nations in the eurozone to need a
   bailout. But it is the first time that other European countries, the
   European Central Bank and the International Monetary Fund forced large
   bank depositors to pay part of the cost.
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   [1]http://www.voanews.com/content/cyprus-bank-bailout/1640167.html

References

   1. http://www.voanews.com/content/cyprus-bank-bailout/1640167.html