YEREVAN, May 14. /ARKA/. Cyprus’s first aid payment has been officially approved by the European Stability Mechanism, the unit responsible for providing funding for euro-area bailouts.
The Board of Directors of the European Stability Mechanism (ESM) announced in the last few minutes that they have approved the Financial Assistance Facility Agreement for Cyprus.
The ESM is now transferring €2billion to Nicosia immediately, with another €1bn due by the end of June. Klaus Regling, managing director of the ESM, announced: “The loans granted by the ESM help to maintain financial stability in the euro area and buy time for Cyprus”.
This time enables Cyprus to undertake the reforms necessary to rebuild its economy on a sustainable basis.The ESM’s decision means there’s no danger of Cyprus running out of funding in the short term. It is due to receive a total of €10billon of external loans by early 2016, under the bailout deal agreed in March.
The Board of Directors of the European Stability Mechanism (ESM) approved
the Financial Assistance Facility Agreement and the disbursement of the first tranche of
financial assistance to the Republic of Cyprus.
According to the ESM press release “The first tranche is transferred in two separate disbursements: the first – of €2 billion has been transferred today, and the second up to €1 billion to be transferred before 30 June 2013. Both disbursements will be made in cash, and will be used for the general financing needs of the public sector (roll-over of maturing debt) and fiscal needs.”
“The loans granted by the ESM help to maintain financial stability in the euro area and buy time for Cyprus”, Klaus Regling, Managing Director of the ESM said. “This time enables
Cyprus to undertake the reforms necessary to rebuild its economy on a sustainable basis.” “In accordance with the decisions taken by the Eurogroup on 25 March 2013, Cyprus will
receive assistance of up to €10 billion during the next three years. The ESM is expected to provide up to €9 billion and the International Monetary Fund is to contribute around €1 billion, subject to approval by its Executive Board.” (guardan.co.uk). –0–
