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Greece’s PM Alexis Tsipras says he believes it will be possible to find a solution to the stand-off with the EU over his country’s debt.
Alexis Tsipras said he was “optimistic” after meeting the heads of the European Commission, European Council and European Parliament in Brussels.
The new prime minister and his finance minister are on a diplomatic offensive to reassure eurozone leaders about their plans.
Alexis Tsipras has pledged to renegotiate the terms of a €240 billion bailout.
His far-left party Syriza was elected last month on a promise to end austerity measures.
“We respect the rules of the European Union,” Alexis Tsipras said after his meetings on February 4.
“I’m very optimistic… Of course we don’t have already an agreement but we are in a good direction to find a viable agreement.”
Speaking at the joint news conference, European Parliament President Martin Schulz described their talks as “fruitful” but said there were difficult times ahead.
Meanwhile, Greek Finance Minister Yanis Varoufakis said his talks with ECB chief Mario Draghi in Frankfurt had also been encouraging.
“We had a very fruitful discussion and exchange,” Yanis Varoufakis told reporters.
He is keen to convince the ECB that Greece’s debt payments could be linked to the performance of the economy – the more it grows the more interest Greece would pay – through the use of debt swaps.
However, a report in the Financial Times quoted officials involved in the negotiations as saying that the ECB would oppose a crucial part of his plan – the sale of short-term treasury bills to raise €10 billion.
Today’s talks were the latest in a series of European trips to reassure leaders about the plans of a government elected on January 25 on a promise of writing off most of Greece’s spiraling debt.
Alexis Tsipras’s Syriza party had also sparked alarm on the markets and among eurozone officials when it said it would refuse a new tranche of bailout funding, prompting questions about how it would finance itself.
Greece’s current program of loans ends on February 28. A final €7.2 billion is still to be negotiated, but the new government has already begun to roll back austerity measures.
Yanis Varoufakis is hoping to obtain quick cash for Greece while a new plan is agreed amongst the various eurozone members.
Eurozone finance ministers are due to meet on February 11 to discuss Greece’s debt proposals.
Earlier, Alexis Tsipras met European Commission President Jean-Claude Juncker and European Council President Donald Tusk.
Jean-Claude Juncker was expected to press Alexis Tsipras for a “technical” extension of Greece’s current deal. The Greek leader is to travel to Paris to meet President Francois Hollande later.
On February 5, Yanis Varoufakis is expected to meet Wolfgang Schaeuble, the German finance minister.
Wolfgang Schaeuble has emerged as the one of the toughest critics of the new Greek government, previously saying: “Elections change nothing. There are rules.”
German Chancellor Angela Merkel has ruled out Greece’s debt cancellation, saying creditors had already made concessions.
Greece still has a debt of €315 bilion – about 175% of GDP – despite some creditors writing down debts in a renegotiation in 2012.
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Deflation has deepened across the 19 countries that use the euro currency.
In January, prices in the eurozone were 0.6% down on their levels a year ago.
The figure shows the eurozone heading deeper into deflationary territory from December, when prices were 0.2% down on the year before.
A large contributor to falling prices is the cost of energy, with oil prices down almost 60% on the middle of last year.
Energy prices plunged 8.9% in January.
If food and energy are stripped out of the calculations, eurozone prices were still rising at an inflation rate of 0.5%, down from 0.7% the month before.
The eurozone has only once before experienced deflation at these levels, in July 2009, as the region first went into recession following the financial crisis.
Last week the European Central Bank (ECB) launched a program aimed at pushing prices back up – known as quantitative easing – through which it injected around 1 trillion euros into the economy.
Christian Schulz, senior economist at Berenberg Bank said the latest figures showed that “the ECB was … more than justified in taking aggressive action earlier this month.
“The multi-stimulus of cheap oil, a weak euro and aggressive monetary easing is now stabilizing expectations and will help the ECB reach its price stability target over time.”
There was better news on eurozone unemployment, which fell to 11.4% in December, down from 11.5% in November.
Within that figure there are huge differences between jobless levels in different countries.
Germany has a 4.8% unemployment rate. But 25.8% of Greece’s labor force is out of work and Spain’s jobless rate is 23.7%.
The euro was slightly higher after the news, rising 0.35% against the dollar to $1.1358, and sending the pound down 0.25% to €1.3276.
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The European Central Bank (ECB) has unveiled an €1.1 trillion ($1.3 trillion) plan to boost eurozone economy.
The ECB will buy bonds worth €60 billion ($72 billion) per month until the end of September 2016 and possibly longer, in what is known as quantitative easing (QE).
The bank has also said eurozone interest rates are being held at the record low of 0.05%, where they have been since September 2014.
ECB president Mario Draghi said the program would begin in March.
The eurozone is flagging and the ECB is seeking ways to stimulate spending.
Earlier this month, figures showed the eurozone was suffering deflation, creating the danger that growth would stall as businesses and consumers shut their wallets, as they waited for prices to fall.
Mario Draghi said the program would be conducted “until we see a sustained adjustment in the path of inflation”, which the ECB has pledged to maintain at close to 2%.
He told a news conference the ECB would be purchasing euro-denominated investment grade securities issued by euro-area governments and agencies and European institutions.
However, “some additional eligibility criteria” would be applied in the case of countries under an EU and International Monetary Fund (IMF) adjustment program.
The value of the euro fell following Mario Draghi’s announcement, falling by more than a cent against the US dollar to $1.1472.
Lowering the cost of borrowing should encourage banks to lend and eurozone businesses and consumers to spend more.
It is a strategy that appears to have worked in the US, which undertook a huge program of QE between 2008 and 2014.
The UK and Japan have also had sizeable bond-buying programs.
Mario Draghi said the ECB’s own program had been taken “to counter two unfavorable developments”.
“Inflation dynamics have continued to be weaker than expected,” he said, with most inflation indicators at or close to historical lows.
“Economic slack in the euro area remains sizeable and money and credit developments continue to be subdued,” he added.
At the same time, it was necessary to “address heightened risks of too prolonged a period of low inflation”.
Mario Draghi said there had been a “large majority” on the ECB’s governing council in favor of triggering the bond-buying program now – “so large that we did not need to take a vote”.
Up until now, the ECB has resisted QE, although Mario Draghi reassured markets in July 2012 by saying he would be prepared to do whatever it took to maintain financial stability in the eurozone, nicknamed his “big bazooka” speech.
Since then, the case for quantitative easing has been growing.
In advance of the ECB’s announcement, there had been speculation that the central bank would not actually buy any bonds itself, but would invite the central banks of eurozone member governments to do so.
In the event, Mario Draghi said only 20% of the new asset purchases would require national central banks to shoulder risks outside their own borders.
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The euro has reached a nine-year low against the US dollar as investors predicted the European Central Bank (ECB) may act to stimulate the economy.
The European currency fell by 1.2% against the dollar to $1.1864, marking its weakest level since March 2006, before recovering slightly to $1.19370.
The drop follows ECB president Mario Draghi’s comments indicating the bank could soon start quantitative easing (QE).
Greek political turmoil also weighed on the currency.
Although the ECB has already cut interest rates to a record low level, and also bought some bonds issued by private companies, a full-scale program of QE has not yet been launched.
On January 2, Mario Draghi hinted in a newspaper interview that the ECB might soon start a policy of QE by buying government bonds, thus copying its counterparts in the UK and US.
The purpose would be to inject cash into the banking system, stimulate the economy and push prices higher.
In an interview with German newspaper Handelsblatt, Mario Draghi said: “We are making technical preparations to alter the size, pace and composition of our measures in early 2015.”
Political turmoil in Greece also weighed on the euro, with fears that the general election on January 25, could see the anti-austerity, left-wing Syriza party take control of the country.
The possibility has sparked fears about whether Greece will stick to the terms of its international bailout and stay in the eurozone.
On January 3, German magazine Der Spiegel magazine said Germany believes the eurozone would be able to cope with a Greek “exit” from the euro, if the Syriza party wins the Greek election.
Reacting to the Der Speigel report, a spokesman for German Chancellor Angela Merkel said there was no change in German policy and the government expects Greece to fulfill its obligations under the EU, ECB and IMF bailout.
France’s President Francois Hollande also commented, saying it was now “up to the Greeks” to decide whether to remain a part of the single currency.
“Europe cannot continue to be identified by austerity,” Francois Hollande added, suggesting that the eurozone needs to focus more on growth than reducing its deficit.
Analysts said the euro was likely to remain volatile for the next few weeks.
Greece is to receive its next 8.3 billion euro ($11.4 billion) bailout in three installments, eurozone finance ministers have announced.
A first tranche of 6.3 billion euros will be paid at the end of April, Eurogroup chairman Jeroen Dijsselbloem said at a meeting of finance ministers in Athens.
Two more payments of 1 billion euros will be made in June and July, he added.
Ahead of the meeting, demonstrators were barred from parts of Athens including Syntagma Square, the focus of recent anti-austerity protests.
Greece, the current chair of the EU presidency, continues to struggle with high debt and unemployment.
Greece is to receive its next 8.3 billion euro bailout in three installments
Discussions at Tuesday and Wednesday’s meetings include Greece’s austerity programme and market reforms demanded under the terms of its international bailouts.
The latest bailout is one of the last Greece will get from the eurozone. The International Monetary Fund (IMF) will continue to pay its installments for some months.
It comes after the Greek parliament narrowly passed a raft of reforms, mainly to open up retail sectors to competition.
The latest bailout announcement comes amid renewed optimism about Greece’s economic recovery.
Greece has wiped out its deficit, except for interest on its debt, and is forecast to exit six years of recession this year.
Athens hopes the progress will spur the Eurozone to consider debt relief in the coming months, by lowering the interest rate on its loans or extending the repayment period.
But unions and left-wing groups have called for mass protests on Tuesday.
They say people are still suffering under the austerity measures implemented under the bailout terms.
Unemployment is running at 27%, and many Greeks are still feeling the effects of tax rises and spending cuts.
It is unclear whether protesters will attempt to enter prohibited areas and try to reach Syntagma Square.
Athens has enforced protests bans in the past, including when German Chancellor Angela Merkel made high-profile visits.
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Eurozone’s economy grew by 0.3% in Q4 2013, up from 0.1% growth in the previous quarter.
It was the third quarter of growth since the end of an 18-month recession, the longest period of contraction to affect the single currency area.
The eurozone figures include 17 of the EU’s economies. Latvia became the currency zone’s 18th member in January.
Across the whole 28-nation EU, including the UK, growth for October-to-December 2013 period was 0.4%.
The figures from Eurostat, the EU’s statistics office, also showed that during 2013, GDP contracted by 0.4% in the eurozone, but increased by 0.1% in the EU as a whole.
“The eurozone’s recovery has moved up a gear,” said Chris Williamson, chief economist of Markit.
“Not only has the pace of growth picked up to the fastest since the second quarter of 2011, but the recovery is also becoming more broad-based, encompassing core and so-called ‘periphery’ countries alike.”
Eurozone’s economy grew by 0.3 percent in Q4 2013
Earlier, French government figures indicated the country’s economy grew by 0.3% in the last three months of 2013.
The INSEE statistical office also reported that growth was zero in the third quarter of 2013, revised up from an initial estimate of a 0.1% contraction.
The figures mean that the world’s fifth-largest economy escaped falling back into recession.
Over the whole of 2013, the French economy grew by 0.3%.
The German economy also notched up higher growth in the October-to-December period.
According to the federal statistics office, Destatis, Germany’s GDP expanded by 0.4% in the final quarter of 2013, after seeing growth of 0.3% in the previous three months
Destatis said the figures were boosted by exports and capital investment, but there were “mixed signals” from domestic demand, with a drop in household spending.
According to preliminary figures, Germany’s economy grew by 1.3% in 2013, the statistics office said.
In general, the German figures were better than analysts had been expecting.
Italy’s official statistics office also issued figures showing that its economy returned to growth after a two-year recession.
Istat said GDP grew by 0.1% in the final quarter of 2013, after showing zero growth in the previous three months.
However, during 2013 as a whole, the economy shrank by 1.9%.
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Latvia has joined the eurozone as of 1st of January 2014, becoming the 18th member of the group of EU states which uses the euro as its currency.
The former Soviet republic on the Baltic Sea recently emerged from the financial crisis to become the EU’s fastest-growing economy.
Correspondents report much skepticism in the country after recent bailouts for existing eurozone members.
But there is also hope that the euro will reduce dependency on Russia.
EU commissioner Olli Rehn said joining the eurozone marked “the completion of Latvia’s journey back to the political and economic heart of our continent, and that is something for all of us to celebrate”.
The government and most business owners also welcomed the single currency, saying it would improve Latvia’s credit rating and attract foreign investors.
However, some opinion polls suggested almost 60% of the population did not want the new currency.
Latvia became the 18th member of the group of EU states which uses the euro as its currency
“It’s a big opportunity for Latvia’s economic development,” PM Valdis Dombrovskis said after symbolically withdrawing a 10-euro note as fireworks led celebrations in the capital Riga after midnight.
The governor of the Latvian central bank, Ilmars Rimsevics, said: “Euro brings stability and certainty, definitely attracting investment, so new jobs, new taxes and so on. So being in the second largest currency union I think will definitely mean more popularity.”
One of those reluctant to give up Latvia’s own currency, the lats, was Zaneta Smirnova.
“I am against the euro,” she told AFP news agency.
“This isn’t a happy day. The lats is ours, the euro isn’t – we should have kept the lats.”
Leonora Timofeyeva, who earns the minimum wage of 200 lats (284 euros; $392) per month tending graves in a village north of the capital Riga, said: “Everyone expects prices will go up in January.”
But pensioner Maiga Majore believed euro adoption could “only be a good thing”.
“To be part of a huge European market is important,” she told AFP.
“All this talk about price rises is just alarmist.”
Alf Vanags, director of the Baltic International Centre for Economic Policy Studies, told Bloomberg news agency he personally did not like giving up the familiar lats but it was an “entirely irrational sentiment”.
Euro adoption was good for Latvia “on balance”, he argued, since it provided a mutual insurance policy that countries could draw on when they got into trouble.
Latvia, with its large ethnic Russian minority, is often seen as having closer economic ties to Russia than its fellow Baltic states Lithuania and Estonia. Russia remains an important export market while its banking system attracts substantial deposits from clients in other ex-Soviet states.
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The European Commission has warned Italy and Spain that their draft budgets for 2014 may not comply with new eurozone debt and deficit rules.
The European Union’s executive arm also said French and Dutch plans only just passed muster.
Non-complying countries may have to revise their tax and spending plans before re-submitting them to national parliaments.
It is the first time the Commission has done this.
The European Commission has warned Italy and Spain that their draft budgets for 2014 may not comply with new eurozone debt and deficit rules
Under EU rules, eurozone member states are obliged to cut deficits until they achieve a balanced budget or go into surplus.
They also have to reduce public debt levels.
The European Commission does give countries some flexibility if their deficit is below the EU ceiling of 3% of gross domestic product (GDP) and their debt levels are falling.
But when Italy, the eurozone’s third largest economy, asked for such leniency over its 2014 budget plans, the Commission refused because its public debt is still rising.
France, which has slipped back into recession, has taken steps to cut its deficit to below the 3% threshold, but its structural reform plans were only making “limited progress”, the Commission said.
Other countries at risk of breaking EU rules included Finland, Luxembourg and Malta.
Ireland is to make a clean break from its 3-year 85 billion euro bailout programme in December, without seeking precautionary funding.
Irish PM Enda Kenny confirmed the move during a speech to the parliament.
The Irish economy is emerging from one of the deepest recessions in the eurozone, having sought an international bailout in November 2010.
Ireland is due to leave the EU-IMF bailout on December 15.
Enda Kenny said: “We will exit the bailout in a strong position. The government has been preparing for a return to normal market trading.
“We will set out a path to a brighter economic future for our people, a path from mass unemployment to full employment, from involuntary emigration to the return of thousands of people who have to leave for other countries to find work.
Ireland is to make a clean break from its 3-year 85 billion euro bailout programme in December, without seeking precautionary funding
“Today is just the latest step in that ongoing journey, a significant step indeed but also just another step towards our ultimate job of getting Ireland working again.”
He added that German chancellor Angela Merkel pledged to work closely with Ireland to improve funding mechanisms for the economy, including access to finance for small and medium businesses.
International Monetary Fund managing director Christine Lagarde said the performance of Ireland bodes well for the future.
“The Irish authorities have established a very strong track record of policy implementation. This bodes well as Ireland exits its EU/IMF-supported programme,” she said.
It is understood a decision not to seek a special overdraft facility was finalized at an emergency cabinet meeting on Thursday, ahead of Finance Minister Michael Noonan flying out to a summit in Brussels.
The Department of Finance said confidence and sentiment towards Ireland has improved considerably in recent months and domestic and international economic conditions were also improving.
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Eurozone’s economy grew by just 0.1% in Q3 2013, down from 0.3% growth in the previous quarter.
The figure marks just the second quarter of a growth phase that replaced an 18-month recession, the longest period of contraction to affect the single currency area.
It shows the eurozone’s recovery is extremely tentative.
Europe’s Central Bank last week cut interest rates to 0.25% to lift growth.
Europe’s economy is taking far longer to recover than the other advanced regions affected by the credit crisis of 2008.
Weaker countries in the eurozone have been propped up by bailout money, advanced on condition they cut government spending sharply to reduce their debts.
Moves to do this have hit directly at voters, through large-scale job cuts, reduced wages and pensions, higher taxes and widespread changes to public services.
With the resulting higher unemployment and fall in living standards, few economists think there is much there to drive forward a robust recovery.
Growth of 1.1% is being predicted by the European Commission for next year and 1.7% in 2015.
Eurozone’s economy grew by just 0.1 percent in Q3 2013
The US, with its own giant government debt, is currently growing at an annualized rate of 2.8%, compared with the eurozone’s rate so far this year of about 0.4%.
Even figures from the region’s strongest and most important economies, France and Germany, proved disappointing.
France shrank 0.1% in the third quarter of the year, while German growth slowed to 0.3% from 0.7% in the previous quarter.
Figures from Italy, the third most important country, showed its economy shrank by 0.1%, after a 0.3% contraction in the second quarter.
There were better signs of economic activity from some of the worst-hit countries in southern Europe.
Spain returned to quarter-on-quarter growth for the first time since the first quarter of 2011, albeit with growth of just 0.1%.
Portugal’s economy grew by 0.2% in the quarter.
When France’s economy grew by 0.5% in the second quarter of the year, it pulled the country out of recession, although economists had not expected that level of growth to be sustained.
Figures from the national statistics agency Insee showed that exports dropped by 1.5% in the third quarter, while business investment fell by 0.6%.
However, France’s Finance Minister, Pierre Moscovici, said he still believed the economy would grow by 0.1-0.2% over 2013 as a whole.
Germany’s statistics office Destatis also cited weak exports as a factor holding back growth.
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The French government has revealed the country’s public debt will hit a record 95.1% of GDP in 2014, above previous estimates, and up from 93.4% in 2013.
The figure was revealed as the country unveiled its budget for next year.
The debt should fall back in 2015, and repeated its aim to bring the public deficit below 3% that year, the EU’s deadline for doing so.
The government also said there will be some tax increases for households, but other tax reductions for businesses.
In addition, the budget focuses on tightening public spending, with some 15 billion euros in savings planned, as part of a plan to cut some 18 billion euros off the deficit.
France public debt will hit a record 95.1 percent of GDP in 2014
Debt servicing costs will rise to 46.7 billion euros, compared with 45 billion euros in 2013.
The 2014 budget is based on a growth forecast of 0.9%, lowered from a previous 1.2% forecast, with just 0.1% in growth forecast for this year.
But an economist has warned that next year’s growth figure was no cause for optimism.
“We can’t talk about a recovery as long as economic growth is around 1%,” said Eric Heyer, an economist with the French Observatory for Economic Forecasts.
“Since today, we produce less than five years ago, we are still in recession. That’s the real definition of a recession.
“The real rebound will be when we have a production level well above 2007 and when the economy has started to create jobs again. That’s not in the government’s scenario.”
In other measures, there will be a change in corporate tax policy, with a new levy being introduced based on operating profits.
The much-heralded 75% tax rate on salaries of more than 1 million euros a year will be introduced.
However, this tax will be paid by firms rather than employees.
France is the eurozone’s second largest economy after Germany.
Meanwhile, France will issue 174 billion euros in medium and long-term debt in 2014, compared with an estimated 169 billion euros this year.
Eurozone has emerged from recession after a record 18 months of economic contraction.
According to the Eurostat agency, eurozone’s GDP grew by 0.3% in the second quarter of 2013, slightly ahead of forecasts.
The growth was widely expected after the German economy rose 0.7% between April and June.
However, the overall figure masks the mixed economic fortunes among the countries that make up the 17-country eurozone area.
Germany and France both posted stronger-than-expected growth, expanding 0.7% and 0.5% respectively.
Portugal, among the smallest and the weakest eurozone economies, showed the fastest growth, at 1.1%.
Eurozone has emerged from recession after a record 18 months of economic contraction
The country was one of three that had to take a multi-billion-euro bailout.
But Spain, which had to seek outside support for its struggling banking sector, saw its economic output fall by 0.1% on the quarter.
Italy and the Netherlands both saw output drop by 0.2%.
European Commission Vice-President Olli Rehn said the figures suggested the European economy was gradually gaining momentum, but added there was no room for complacency.
“There are still substantial obstacles to overcome: the growth figures remain low and the tentative signs of growth are still fragile,” he said.
“A number of member states still have unacceptably high unemployment rates; the implementation of essential, but difficult reforms across the EU is still in its early stages. So there is still a very long way to go.”
Analysts from Capital Economics said: “The return to modest rates of economic growth in the eurozone as a whole won’t address the deep-seated economic and fiscal problems of the peripheral countries.”
The figures reaffirm Germany’s position as the powerhouse behind the eurozone.
Germany narrowly avoided recession earlier this year, but GDP in the second quarter of 2013 was driven up by demand from both consumers and businesses.
The improvement comes just weeks before a federal election that will see Chancellor Angela Merkel stand for a third term in office.
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The International Monetary Fund has admitted that it made mistakes in handling Greece’s first international bailout.
The IMF said it was too optimistic in its growth assumptions and said a debt restructuring should have been considered earlier.
Greece was granted a 110 billion euro ($145 billion) bailout by the IMF and EU in May 2010.
Another 130 billion euro rescue package was approved in February 2012.
Greece’s first bailout came amid fears the country would default on its debts and that it could spark debt contagion in the eurozone.
The IMF has now released a study looking at the handling of the programme.
It admitted that it bent its own rules on exceptional access for the programme to go ahead.
To justify exceptional access, one of the four criteria that must be met is that public debt is sustainable in the medium term.
But the IMF said: “Even with implementation of agreed policies, uncertainties were so significant that staff were unable to vouch that public debt was sustainable with high probability.”
But staff wanted to go ahead with exceptional access because of fears that any spillovers from Greece would threaten the rest of the eurozone and the global economy.
The IMF then amended the criterion to where debt was not sustainable with high probability, “a high risk of international spillover effects provided an alternative justification”.
The IMF has admitted that it made mistakes in handling Greece’s first international bailout
The IMF described the programme, which ran from May 2010 to March 2012, as a “holding operation” that gave the euro area “time to build a firewall to protect other vulnerable members and averted potentially severe effects on the global economy”.
It said it had notable successes such as achieving strong fiscal consolidation, Greece remaining in the eurozone and any spillovers that might have had a severe impact on the global economy were relatively well-contained.
But it also said there were notable failures, chiefly market confidence was not restored, the banking system lost 30% of its deposits and the Greek economy experienced a much deeper-than-expected recession.
Greece’s economic output (GDP) in 2012 was 17% lower than in 2009, compared with the IMF and EU’s initial projection of a 5.5% decline. The original growth projections were not marked down until the fifth review in December 2011.
The unemployment rate in 2012 was 25%, compared with the original programme projection of 15%.
The IMF added that in future Fund staff should be more skeptical about official data.
The Fund also criticized the delay in restructuring Greece’s massive debt load by forcing private holders of Greek bonds to take losses, which eventually took place in the first half of 2012.
“Not tackling the public debt problem decisively at the outset or early in the programme created uncertainty about the euro area’s capacity to resolve the crisis and likely aggravated the contraction in output,” the report said.
It said an upfront debt restructuring would have been better for Greece but this was “not acceptable to the euro partners”, some of whose banks held large amounts of Greek government debt.
The report also said there was no clear division of labor between the IMF, the EU and the European Central Bank, the so-called “troika”.
It said that while there were “occasional marked differences of view” within the troika, these were generally not on display to the authorities so did not risk slowing negotiations, and noted that “co-ordination seems to have been quite good under the circumstances”.
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Latvia will become the 18th EU country to use the euro after being approved for membership by the European Commission.
In a report, the Commission confirmed that Latvia had met the criteria for joining the single currency.
Officials hope the news will show the eurozone is set to grow despite a three-year sovereign debt crisis.
The Baltic state is keen to strengthen ties with Western Europe and reduce its dependency on Russia.
Latvia will start using the currency at the beginning of 2014 after meeting the criteria for membership, including low inflation and long-term interest rates, as well as low public debt.
The news came as no surprise after officials said the decision would be “positive” earlier in the week.
Unlike some established members of the zone, Latvia was well within the economic limits set by Brussels for joining.
Latvia will become the 18th EU country to use the euro after being approved for membership by the European Commission
“In much of Eastern Europe there’s widespread enthusiasm – certainly among policy makers – for joining the single currency,” he noted.
“However, polls suggest that many in the country are worried the switch could drive prices higher.”
Anti-euro parties won more than half of the vote in elections in the capital, Riga, last weekend.
Latvia underwent one of Europe’s toughest austerity programmes after the 2008-2009 financial crisis knocked a fifth off its GDP.
Its membership still has to be approved by EU leaders and the European Parliament, but that is seen as a formality.
EU finance ministers are expected to sign off the accession in July.
The European Central Bank (ECB) also gave its blessing to Latvia on Wednesday ahead of the Commission’s announcement, but warned high foreign deposits in its banks were a risk to financial stability.
“The reliance by a significant part of the banking sector on non-resident deposits as a source of funding, while not a recent phenomenon, is again on the rise and represents an important risk to financial stability,” the ECB said.
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According to official figures, eurozone unemployment rate has reached another record high in April 2013.
The seasonally-adjusted rate for April 2013 was 12.2%, up from 12.1% the month before.
An extra 95,000 people were out of work in the 17 countries that use the euro, taking the total to 19.38 million.
Both Greece and Spain have jobless rates above 25%. The lowest unemployment rate is in Austria at 4.9%.
The European Commission’s statistics office, Eurostat, said Germany had an unemployment rate of 5.4% while Luxembourg’s was 5.6%.
The highest jobless rates are in Greece (27.0% in February 2013), Spain (26.8%) and Portugal (17.8%).
In France, Europe’s second largest economy, the number of jobless people rose to a new record high in April.
“We do not see a stabilization in unemployment before the middle of next year,” said Frederik Ducrozet, an economist at Credit Agricole in Paris.
“The picture in France is still deteriorating.”
Eurozone unemployment rate has reached another record high in April 2013
Youth unemployment remains a particular concern. In April, 3.6 million people under the age of 25 were out of work in the eurozone, which translated to an unemployment rate of 24.4%.
Figures from the Italian government showed 40.5% of young people in Italy are unemployed.
“We have to deal with the social crisis, which is expressed particularly in spreading youth unemployment, and place it at the centre of political action,” said Italy’s President Giorgio Napolitano.
In the 12 months to April, 1.6 million people lost their jobs in the eurozone.
While the jobless figure in the eurozone climbed for the 24th consecutive month, the unemployment rate for the full 27-member European Union remained at 11%.
The eurozone is in its longest recession since it was created in 1999. At 1.4%, inflation is far below the 2% target set by the European Central Bank (ECB).
Consumer spending remains subdued. Figures released on Friday showed that retail sales in Germany fell 0.4% in April compared with the previous month.
Earlier this week, the Organization for Economic Co-operation and Development (OECD) predicted that the eurozone economy would contract by 0.6% this year.
According to Carsten Brzeski, an economist at ING, in the past, the eurozone has needed economic growth of about 1.5% to create jobs.
Some consider that the ECB needs to do more than simply cutting interest rates to boost economic activity and create jobs.
Earlier this month, the ECB lowered its benchmark interest rate to 0.50% from 0.75%, the first cut in 10 months, and said it was “ready to act if needed” if more measures were required to boost the eurozone’s economic health.
In its report earlier this week, the OECD hinted that the ECB might want to expand quantitative easing (QE) as a measure to encourage stronger growth.
The European Central Bank is due to meet next week.
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The OECD has revised its growth forecasts for the eurozone and called on the European Central Bank to consider doing more to boost growth.
The organization says the eurozone will shrink by 0.6% this year, widening the gap between it and faster-growing economies such as the US and Japan.
Meanwhile, the European Commission has given France two more years to complete its austerity programme.
France fell back into recession in the first three months of the year.
Spain, Poland, Portugal, the Netherlands and Slovenia have also been given more time to complete fiscal tightening.
The move suggests a shift away from a focus on austerity in Europe.
In its twice-yearly Economic Outlook, the OECD said prolonged economic weakness in Europe could damage the global economy.
The OECD, which represents 34 advanced economies, forecast average growth across its members of 1.2% this year and 2.3% in 2014.
It painted a troubled picture of the eurozone economy. The forecast of a 0.6% contraction in GDP is down markedly from the 0.1% contraction forecast just six months ago.
It said eurozone unemployment would continue to rise from its current rate of 12%, stabilizing in 2014.
The OECD has revised its growth forecasts for the eurozone and called on the European Central Bank to consider doing more to boost growth
It blamed continuing austerity measures, weak confidence and tight credit conditions. It hinted that the European Central Bank (ECB) might want to expand quantitative easing (QE) as a measure to encourage stronger growth.
It warned the continuing weakness in Europe “could evolve into stagnation, with negative implications for the global economy”.
The US and Japan have seen a greater focus on stimulus measures compared with Europe, where austerity measures have taken precedence.
Japan is forecast to grow relatively strongly this year, adding 1.6% to its GDP on the back of extraordinary economic stimulus measures introduced by the government this year.
But the OECD said there was considerable uncertainty over whether that recovery would continue into 2014, when the government is expected to cut spending.
In the US, where growth of nearly 2% is forecast for this year, the OECD said quantitative easing measures might need to be “gradually reduced”.
China is not included in the OECD club, but the organization expects its annual growth to be about 8% over the next two years.
The OECD’s chief economist, Pier Paolo Padoan, told Reuters that the eurozone remained the dominant area of concern.
“Europe is in a dire situation,” he told the news agency.
“We think that the eurozone could consider more aggressive options. We could call it a eurozone-style QE.”
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France has entered its second recession in four years after the economy shrank by 0.2% in the first quarter of 2013, according to official figures.
The country’s economy shrank by the same amount in the last quarter of 2012. A recession is defined as two consecutive quarters of negative growth.
France has record unemployment and low business and consumer confidence.
German figures, also released, showed its economy, the eurozone’s strongest, grew by just 0.1% in Q1 2013.
France entered its worst recession since World War II in 2009. Although it was thought to have been in recession in 2012, these figures have now been revised to show only one quarter of negative growth.
The news comes on the first anniversary of Francois Hollande being sworn in as president.
Earlier this month, the European Commission warned that France would enter recession this year and said the eurozone’s economy would shrink by 0.4%.
France has entered its second recession in four years after the economy shrank by 0.2 percent in Q1 2013
The European Central Bank (ECB) cut interest rates at its last meeting to a record low of 0.5% in an attempt to stimulate growth.
In France, the rate of unemployment is running at 10.6% and is forecast to rise further next year.
Its deficit is also expected to rise sharply, the commission says, to 3.9% of GDP – well above the EU deficit target of 3%.
But French unemployment is below the eurozone average, which was 11.4% in 2012 and is expected to hit an average of 12.2% this year. In both Greece and Spain, it is expected to peak at 27%.
France this week passed a range of measures aimed at stopping the rise in unemployment by reforming the country’s labor laws.
These include measures to make it easier for workers to change jobs and for companies to fire employees.
The French economy has performed better than other eurozone members, including Spain and Italy, but it has not moved as quickly to reform its economy.
One of the new bill’s main measures is to allow companies to cut workers’ salaries or hours temporarily during times of sluggish economic performance, something that is common in Germany.
The figure for German growth, the largest and still the strongest economy in the 17-strong eurozone, was far weaker than expected. Economists had expected to see growth of 0.3% in the first quarter.
Annual figures from the Statistics Office also show the German economy has shrunk by 1.4% when compared with a year ago.
But in a statement it said this was partly due to severe winter weather: “The German economy is only slowly picking up steam. The extreme winter weather played a role in this weak growth.”
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The European Central Bank (ECB) has decided to cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone’s economy.
The widely-expected cut to 0.50% from 0.75% is the first in 10 months.
Worries about eurozone economies were underlined on Thursday with data showing manufacturing activity across the 17-nation bloc shrank in April.
In Germany, the eurozone’s biggest economy, manufacturing contracted for the second month running.
Official data released on Tuesday showed record high unemployment in the eurozone, and inflation at a three-year low.
Ahead of the ECB’s announcement, many economists were forecasting that lower interest rates were likely, but said the fresh data released this week made the case for a cut even stronger.
ECB president Mario Draghi told a news conference that “weak economic sentiment has extended into the spring of this year.”
“Inflation expectations in the euro area continue to be firmly anchored.”
ECB has decided to cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone’s economy
“The cut in interest rates should contribute to support a recovery later in the year,” he added.
There are concerns that the ECB’s low interest rates are not feeding through to those economies most in need of a boost, with potential lenders still worried about the economic health of countries such as Greece and Spain.
“Monetary policy stance will remain ‘accommodative’ for as long as needed,” Mario Draghi said.
“We will monitor very closely all incoming information, and assess any impact on the outlook for price stability.”
Mario Draghi said that the ECB was prepared to cut interest rates further should conditions make it necessary. He also said the central bank was “technically ready” for negative deposit rates.
The euro fell sharply on the comments, losing 0.6% against the pound to 84.135p, edging it towards the recent low of 83.98p that it reached on April 26. Against the dollar, the euro fell below $1.31.
In recent months there have been growing calls for European countries to move away from austerity measures, which critics say are stifling growth. Instead there are calls for a greater focus on stimulus measures.
Both French President Francois Hollande and newly-elected Italian Prime Minister Enrico Letta have urged a reconsideration of austerity policies.
On Thursday, European Council President Herman Van Rompuy said governments must take immediate action to promote growth and the creation of jobs because patience with austerity measures is wearing thin in some countries.
“Taking these measures is more urgent than anything,” he told a conference in Portugal.
“After three years of firefights, patience with austerity is wearing understandably thin.”
A cut in interest rates lowers the costs for troubled banks that have taken emergency loans from the ECB, and could help them repair their finances so they can improve lending. But analysts were divided over whether the cut would have much of an impact.
Purchasing Managers’ Index (PMI) on Thursday highlighted the problems facing many eurozone countries. The index for Germany’s manufacturing sector, which accounts for around a fifth of the economy, fell to 48.1 in April from 49 in March. A reading below 50 indicates contraction.
And in France, Italy and Spain, the eurozone’s next three biggest economies, the PMI data also revealed contractions in manufacturing activity.
For the 17-nation eurozone bloc as a whole, the PMI index fell to 46.7 last month, from March’s 46.8.
“There is nothing here to suggest that manufacturing will turn the corner and stabilize any time soon, putting greater onus on policymakers to act quickly to reinvigorate growth,” said Chris Williamson, chief economist at Markit, which collates the PMI figures.
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Ireland and Portugal are to be granted an extra seven years to pay back their emergency bailout loans.
The EU and the IMF bailed out the Republic of Ireland in 2010 and Portugal in 2011.
The eurozone agreed to the terms at a meeting of finance ministers in Dublin.
Meanwhile, the eurozone finance ministers also said a 10 billion euro ($13 billion) EU bailout loan for Cyprus was ready for approval by member states.
That could happen by the end of the month and, if the IMF also gives the go-ahead, the first bailout money could be released by mid-May.
The plan for Ireland and Portugal is intended to give the countries’ financial systems more time to recover from the debt crisis after their bailout loans run out.
Ireland’s bailout money will run out later this year, and Portugal’s will run out in 2014.
Ireland and Portugal are to be granted an extra seven years to pay back their emergency bailout loans
The Irish and Portuguese repayment extensions are expected to be backed by all 27 EU members, which includes those outside the eurozone, later on Friday.
Eurogroup President and Dutch Finance Minister, Jeroen Dijsselbloem, said the ministers in Dublin had commended Portugal on its success in implementing the bailout programme but “asked them to maintain the reform momentum despite the difficult economic and domestic conditions”.
He added: “Ireland is a living example that adjustment programmes do work, provided there is a strong ownership and genuine commitment to reforms.”
The deal could be seen as something of a reward “for good behavior”, but also as recognition that an austerity-first approach was not always the best option.
The extension is especially important for Portugal. When it received a 78 billion euro bailout two years ago, it pledged to take various measures in its budget to reduce public spending.
However, last week Portugal’s Constitutional Court ruled that several of these measures in the 2013 budget were unlawful.
If Portugal was to drop the measures because of this, it may not remain eligible for more funds under its bailout.
On Thursday, it emerged that Cyprus would need to raise an extra 6 billion euros to secure the 10 billion euro bailout from Brussels and the IMF.
While confirming that up to 10 billion euros in loans will be provided to Cyprus, the eurozone finance ministers also rejected reports that the country might be granted more financial assistance.
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The German economy slowed to “near stagnation” in March 2013, while France’s recorded its biggest contraction for four years, according to a Markit survey.
The Markit composite purchasing managers’ index (PMI), which measures both the manufacturing and services sectors, declined to 50.6 in Germany last month, from 53.3 in February.
Any figure above 50 indicates growth.
France’s reading fell to 41.9 points, its worst since March 2009.
For the eurozone as a whole, the index fell to 46.5 from 47.9 in February.
The Markit composite PMI, which measures both the manufacturing and services sectors, declined to 50.6 in Germany last month, from 53.3 in February
Chris Williamson, chief economist at Markit, said the latest data painted a gloomy picture.
“The [eurozone] recession is deepening once again as businesses report that they have become increasingly worried about the region’s debt crisis and political instability,” Chris Williamson said.
“The unresolved election in Italy was commonly cited as a key factor clouding the economic outlook in March, and the botched bail-out of Cyprus could well filter through to a further worsening of business sentiment across the region in April.”
Chris Williamson added that the weak showing from Germany “suggests that the only source of bright light in an otherwise gloomy region has once again begun to fade”.
Germany’s index reading was the worst in the country for three months.
Eurozone unemployment rate reached new record high of 12% in February 2013, according to the official figures.
The number of people unemployed in eurozone, which includes 17 states, rose by 33,000 during February 2013, to hit 19.07 million, the statistics agency Eurostat said.
Eurozone unemployment rate reached new record high of 12 percent in February 2013
The highest rate was 26.4% in Greece, although the most recent figure for the country was from December.
The new figures from Eurostat have also confirmed a deterioration in the eurozone’s manufacturing sector in March.
The final Markit manufacturing PMI index for the month fell to 46.8, slightly higher than an initial estimate but below the 47.9 recorded in February.
Any score below 50 indicates a contraction in the sector.
Cyprus President Nicos Anastasiades says his country has no intention of the leaving the European single currency.
Nicos Anastasiades said: “In no way will we experiment with the future of our country.”
The president said the financial situation was “contained” following the 10 billion euro bailout deal with the EU and IMF.
Cypriot banks opened on Thursday, March 28, for the first time in nearly two weeks amid severe new rules imposed as part of the bailout deal
Cypriot banks opened on Thursday, March 28, for the first time in nearly two weeks amid severe new rules imposed as part of the bailout deal.
Queues formed of people trying to access their money, but the mood was generally calm.
By Friday, banks had returned to their normal working hours and there were no longer reports of big queues.
“We have averted the risk of bankruptcy,” Nicos Anastasiades said on Friday.
“The situation, despite the tragedy of it all, is contained.”
The president told a meeting of civil servants: “We have no intention of leaving the euro.”
However, Nicos Anastasiades accused other members of the eurozone of making “unprecedented demands that forced Cyprus to become an experiment”.
Cyprus needs to raise 5.8 billion euros ($7.4 billion) to qualify for the bailout, and has become the first eurozone member country to bring in capital controls to prevent a torrent of money leaving the island and credit institutions collapsing.
As well as a daily withdrawal limit of 300 euros, Cypriots may not cash cheques and those leaving the country will only be allowed to take 1,000 euros with them.
Payments and/or transfers outside Cyprus via debit and or credit cards are allowed up to 5,000 euros per person per month.
Depositors with more than 100,000 euros will see some of their savings exchanged for bank shares.
Foreign Minister Ioannis Kasoulides said on Thursday that such controls could gradually be lifted over the course of the month.
But many economists predict the controls could be in place for much longer.
Cyprus capital controls
- Daily withdrawals limited to 300 euros
- Cashing of cheques banned
- Those travelling abroad can take no more than 1,000 euros out of the country
- Payments and/or transfers outside Cyprus via debit and or credit cards permitted up to 5,000 euros per month
- Businesses able to carry out transactions up to 5,000 euros per day
- Special committee to review commercial transactions between 5,000 and 200,000 euros and approve all those over 200,000 euros on a case-by-case basis
- No termination of fixed-term deposit accounts before maturity
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Eurogroup have agreed a deal on a 10 billion-euro bailout for Cyprus to prevent its banking system collapsing and keep the country in the eurozone.
Laiki (Popular) Bank – Cyprus’ second-biggest – will be wound down and holders of deposits of more than 100,000 euros will face big losses.
However, all deposits under 100,000 euros will be “fully guaranteed”.
The European Central Bank (ECB) had set a deadline of Monday for a deal.
Laiki will be split into “good” and “bad” banks, with its good assets eventually merged into Bank of Cyprus.
The president of the Eurogroup of eurozone finance ministers, Jeroen Dijsselbloem, told a press conference in Brussels the deal had “put an end to the uncertainty” around Cyprus’s economy.
Jeroen Dijsselbloem added he was “convinced” the new deal was better for the Cypriot people than the broader measure rejected by the Cypriot parliament last week, as it focused on two problem banks rather than the entire sector.
Laiki Bank, Cyprus’ second-biggest, will be wound down and holders of deposits of more than 100,000 euros will face big losses after Eurogroup agreed on bailout
The deal is good news for Cyprus’s small account holders.
All deposits under 100,000 euros will be secured. But for those with deposits of more than that amount in the country’s two biggest banks – Laiki and Bank of Cyprus – the deal will come as a bitter blow.
The percentage to be levied on large deposits in the Bank of Cyprus will be resolved in the coming weeks, Jeroen Dijsselbloem said.
One key element of the deposit tax, demanded by the IMF, is that it not require a parliamentary vote.
EU Commissioner for Economic Affairs Olli Rehn said that the “depth of the financial crisis in Cyprus means that the near future will be difficult for the country and its people”.
Asian financial markets rose in early trading on news of the deal.
The deal came after hours of tense negotiations between Cypriot President Nicos Anastasiades and the “troika” of EU, ECB and IMF leaders.
Nicos Anastasiades had reportedly asked the heads of the troika if they wanted him to quit.
“Do you want to force me to resign?” Cyprus News Agency quoted him as saying, citing sources at the presidential palace.
“I am giving you one proposal, and you do not accept it. I give you another and it’s the same. What else do you want me to do?” Nicos Anastasiades was quoted as saying.
In another development on Sunday, Bank of Cyprus – the island’s biggest lender – further limited cash machine withdrawals to 120 euros a day.
With queues growing outside cash machines across the island, the second biggest lender, Laiki, also lowered its daily limit to 100 euros, Cyprus News Agency reported. The bank’s previous limit had been 260 euros per day.
Banks have been closed since Monday and many businesses are only taking payment in cash.
Jeroen Dijsselbloem said that the details of the re-opening of Cyprus’ banks would be discussed on Monday by the Cypriot government and the troika.
There is concern on Cyprus that a levy on large-scale foreign investors, many of whom are Russian, will damage its financial sector.
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Cyprus officials have announced the country’s banks, which were closed to prevent mass withdrawals, will remain shut until at least Tuesday, March 26th.
The Cypriot government began an emergency meeting this afternoon to discuss alternatives to the EU-IMF bailout deal rejected by parliament on Tuesday.
Reports say the cabinet is considering imposing capital controls when banks are reopened.
Meanwhile, Cyprus’ finance minister is in Moscow to seek help from Russia.
Russia holds multi-billion dollar investments in Cyprus.
Finance Minister Michalis Sarris said after talks with Russian Finance Minister Anton Siluanov: “There were no offers, nothing concrete.”
Talks are expected to continue in Moscow on Thursday.
The banks will remain shut on Thursday and Friday this week and Monday March 25 is a scheduled bank holiday. The stock exchange also remains closed.
Germany has said banks in Cyprus may never reopen if a bailout is not agreed.
Earlier, Cypriot President Nicos Anastasiades met party leaders and the central bank governor in Nicosia to hammer out a Plan B, after a one-off tax on savings failed to get the support of any MPs.
Nicos Anastasiades has also been talking to the European Union, European Central Bank and IMF.
Bank mergers, a bond issue and more Russian funding have all been mentioned as ways to help the country out of the crisis.
The establishment of a “bad bank” which would take on risky assets held by Cypriot banks has also been mentioned by officials.
Cyprus’ banks are still giving out cash through machines – although with limits, and some are running low.
Some businesses are now refusing credit card payments.
Cyprus banks, which were closed to prevent mass withdrawals, will remain shut until at least March 26th
On Wednesday, German Chancellor Angela Merkel said she regretted but respected the Cypriot vote.
Angela Merkel said the eurozone had a duty to find a solution for Cyprus, but added that the country’s current banking system was “not sustainable”.
Cyprus’ banks were left exposed following the debt crisis in Greece and there are fears Cyprus could go bankrupt if they fail.
German Finance Minister Wolfgang Schaeuble warned Cyprus that its banks might never be able to reopen if it rejected the bailout.
The controversial levy had been proposed as the condition for the 10 billion-euro ($13 billion) EU and IMF bailout. Cyprus was expected to raise 5.8 billion euros through the one-off tax on bank savings.
The plan was altered on Tuesday to exempt savers with less than 20,000 euros, but a 6.75% charge on deposits of 20,000-100,000 euros and a 9.9% charge for those above 100,000 euros remained.
However, parliament rejected the deal, with 36 MPs voting against it, 19 abstaining and none in favour.
Protesters outside parliament reacted with joy at the decision.
Cyprus has attracted money through its lower taxes, with Russians holding between a third and half of all Cypriot deposits.
Russian private and corporate deposits are believed to total about $30 billion.
Russian President Vladimir Putin had called the bailout deal “unfair, unprofessional and dangerous”.
Analysts say Russia may provide more funding in return for interests in Cyprus’ offshore energy fields.
One offer of help has come from Cyprus’ Orthodox Church, which is a major shareholder in the third-largest domestic lender, the Hellenic Bank.
Archbishop Chrysostomos I said on Wednesday the Church was willing to mortgage its assets to invest in government bonds.
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Finance ministers from eurozone have agreed a 10 billion-euro ($13 billion) bailout package for Cyprus to save the country from bankruptcy.
The deal was reached after talks in Brussels between the ministers and the International Monetary Fund (IMF).
In return, Cyprus is being asked to trim its deficit, shrink its banking sector and increase taxes.
For the first time in a eurozone bailout, bank depositors are facing a levy on their savings.
Cyprus’ banks were badly exposed to Greece, which has itself been the recipient of two huge bailouts.
“The Eurogroup was able to reach a political agreement with the Cypriot authorities on the cornerstones of this agreement,” Eurogroup head Jeroen Dijsselbloem said after almost 10 hours of the negotiations.
“The assistance is warranted to safeguard financial stability in Cyprus and the eurozone as a whole,” he added.
IMF chief Christine Lagarde, who took part in the talks, said earlier: “We don’t want a Band-Aid. We want something that lasts, that is durable and sustainable.”
The deal also involves a levy on bank deposits intended to ensure investors contribute to the bailout.
Finance ministers from eurozone have agreed a 10 billion-euro bailout package for Cyprus to save the country from bankruptcy
People with less than 100,000 euros in Cypriot bank accounts will have to pay a one-time tax of 6.75%, while those with more will have to pay 9.9%. It is expected to raise 5.8 billion euros in additional revenue.A European Central Bank (ECB) official said the Cypriot authorities had already started to take action to ensure that the levy can be collected. Otherwise, there would be a likelihood of massive withdrawals to avoid it, our correspondent adds.
There has also been speculation that Russia could help finance the bailout by extending a 2.5 billion-euro loan already made to Cyprus. Cypriot Finance Minister Michael Sarris will travel to Moscow for meetings on Monday, reports say.
There are a lot of Russian deposits in the Cypriot banking system, according to economists.
Jacob Funk Kirkegaard, of the US-based Peterson Institute for International Economics, said that was a potential problem for any bailout negotiations.
“There is a general political sentiment that it is not acceptable to be bailing out a country, and thereby putting European taxpayers’ money at risk, to basically protect Russian depositors in Cypriot banks,” he said.
The Cypriot economy accounts for barely 0.2% of the eurozone’s overall output. But there is concern within the euro bloc that a default by Cyprus risks undermining the progress being made in Greece.
Cyprus is the fifth country to receive eurozone assistance since the bloc’s financial crisis began to unfold in earnest nearly three years ago.
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