Eurogroup President Jean Claude Juncker said Monday that an agreement for a Cypriot financial assistance programme will be signed with the new government next March.
In his last press conference as Eurogroup President, Juncker also said that there will be close monitoring of the money laundering combating framework and its implementation.
The Eurogroup was briefed today by Cyprus Finance Minister Vassos Sharly on the progress with regard to the implementation of the Cypriot fiscal adjustment programme agreed between the Cypriot authorities and the Troika of the European Commission, the European Central Bank and the International Monetary Fund late November 2012.
However the Eurozone Finance Ministers did not take any final decisions as the capital needs of the Cypriot financial sector have not been finalised yet. Excluded from the international capital markets since April 2011, Cyprus applied on June 25 for financial assistance after its two largest banks sought state support following massive losses as a result of the haircut of the Greek sovereign debt. The Cypriot programme is estimated to reach 17.5 billion euro, which practically equals to the island`s GDP.
“We welcomed the progress which has already been made by Cyprus in implementing some of the important measures the Troika and the Cypriot authorities are in agreement,” Juncker said in a press conference accompanied by Eurogroup’s new President, Dutch Finance Minister Jeroean Djiselbloem.
Juncker also said that the due diligence exercise on the capital needs of the Cypriot financial sector has progressed, adding that in light with established precedents the final report is expected to be published as soon as the memorandum of understanding would be signed.
Noting that “we were also assured that Cyprus’ short-termed financing needs are covered,” Juncker added that “on this basis we considered that targeting agreement on a programme after the upcoming presidential elections in Cyprus would best facilitate national ownership.”
“We expected therefore that a final agreement on a programme could be reached as of March,” he said.
Juncker said this period will also provide for “close monitoring of the anti-money laundering” framework and its implementation.
Concluding, Juncker said “we call on the troika and the Cypriot authorities to make progress in the interim towards finalising the building blocks of the draft memorandum of understanding.”
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