Negotiations between Cyprus and Brussels on the implementation of a European Council decision to grant Cyprus extra support so that it may deal with the economic crisis are at a final stage.
EU sources in Brussels noted that the extra funding will be derived from the new Multiannual Financial Framework whilst the Commission intends to propose a sum in the order of €200 million.
Cyprus had originally asked for €300 – €400 million, however Commission officials say the amount cannot be met in full at this stage due to lack of funds. They do however promise that the matter will be reviewed again in 2016 in the context of the intermediate review of the EU support framework.
The European Council had invited in June “the European Parliament and the Council to examine the opportunities provided by the flexibilities in the MFF, including the Flexibility Instrument, to address the particularly difficult situation of Cyprus, in the context of the annual budgetary procedure”.
Excluded from international markets since May 2011, Cyprus requested and received a €10 billion financial assistance package from the Troika (EC, the ECB, IMF).
The package featured a sizeable reduction of the island`s banking sector, as well as bail-in of uninsured deposits, which hampered the services sector, one of the island`s main source of income.
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