CYPRUS: Commission comments on President Christofias statements on Troikas bailout terms

Commenting on a remark by a journalist that President Christofias said in the interview he is against the proposed bailout "on ideological grounds", Commission’s Spokesman Olivier Bailly said "you have your own reading of the statement. The way we see the statement is quite different".
He added that “as President Christofias in the same statement also said he is not against the financial assistance process, that discussions are still going on”.

“He also announced his Finance Minister will send comments to the Commission non papers which are at this state the basis of the discussion. For us this is actually good news”, the Spokesman went on to say.
Bailly noted that “the discussion continues and we look forward to receiving the comments from the Cypriot authorities as soon as possible”.

The Government of the Republic of Cyprus informed on the 25th of June 2012 the appropriate European Authorities of its decision to submit to euro area Member States a request of financial assistance from the EFSF/ESM.
The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spill over effects through its financial sector, due to its large exposure in the Greek economy.

On the 27th of June the Eurogroup in a written statement noted that based on a needs assessment, the euro area financial support would be provided in the framework of a comprehensive adjustment programme, building on the measures already taken by the Cypriot authorities and the recommendations put forward by the European Commission on 30 May under the European Semester.
It noted that the programme will be negotiated by the Commission, in liaison with the ECB, with the Cypriot authorities and the IMF.
“After an agreement has been reached with the Cypriot authorities, the programme would be endorsed by the Eurogroup, in line with national procedures, on the basis of an assessment by the Commission, in liaison with the ECB, and the IMF, of the financing needs and the conditionality that shall accompany the assistance”, the Eurogroup said.

Concluding, the Eurogroup said it was confident that the implementation of this programme would address the financial, fiscal and structural challenges of the economy in a decisive manner and should allow Cyprus to return to a sustainable growth path”.
A series of meetings were held in July between the Troika and Cyprus at political and technical level.

The talks, according to the Commission, focused on developing an appropriate strategy for the financial sector, fiscal policy and structural reforms, taking into account the current difficult economic climate and further downside risks to the economic and financial situation.
“Concrete policy options were presented and discussed. Technical progress was made”, a Spokesman of the Commission had told CNA.

He went on to say that, the Troika has since continued its consultations with the Cypriot authorities with a view to achieving the necessary convergence ahead of a further mission to Cyprus, which would take place on the terms set out in the statement by the Eurogroup of 27 June 2012.
President Christofias said in an interview with Greek state broadcaster NET that he cannot accept a bailout on the current terms being offered and that he would not sign a bailout deal, which would provide for the sell-off of profitable semi governmental organizations and would demand the abolishment of inflation-linked salary increments.