Prime Minister of Luxembourg Jean Claude Juncker has said that, not only must progress be made, but a solution must be found for Cyprus at Friday`s Eurogroup meeting.
Juncker said he could not imagine that this weekend would pass without a solution for Cyprus.
Asked if a debt haircut would mean losses for private investors, Juncker said he did not believe a similar solution should be sought blindly but that a solution that did not constitute a clear and simple debt write off should be pursued.
He added that the Eurozone, which has already indicated that the solution implemented in Greece would be the only one, should safeguard its credibility, and noted that the Greek solution should not be repeated.
Excluded from the international markets, Cyprus applied last June for financial assistance from the EU bailout mechanism, after its banks sought state support following massive write downs of the Greek bond holdings amounting to €2.5 billion or 25% of the island`s GDP, as result of the Greek sovereign debt haircut. The Cypriot authorities and the Troika of the European Commission, the European Central Bank and the IMF have agreed on a preliminary memorandum of understanding on the conditions of the bailout initially estimated at €17 billion. However Eurogroup President, Ducth Finance Minister Jeroen Djisselbloem said yesterday that the bailout would be closer to €10 billion.
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