The Finance Minister of Luxembourg Luc Frieden said it was necessary to take a decision to support Cyprus the soonest possible, in order for the Eurozone not to face a crisis, similar to the one with Greece.
Speaking to RTL Radio Letzebuerg, Frieden said that “the more discussions last, the more uncertainty is mounting” and added that the Eurozone can not return to a condition of uncertainty after all that has been done to secure normality.
“All countries are systemic” the Finance Minister said, noting that this fact obliges the Eurozone to act with speed, concluding a bailout agreement with Cyprus.
Excluded from international capital markets, Cyprus has requested financial assistance from the EU bailout mechanism after its two largest banks sought state aid following massive losses of their Greek bond holdings estimated at €4.5 billion, as a result of the Greek sovereign debt haircut.
Commenting on the position of some member states to reduce the size of Cyprus’ banking sector, Frieden said he disagreed, adding that this could not be a precondition in discussions to support Cyprus.
Replying to a question on money laundering, the Finance Minister said international regulations were being implemented by all countries in the same way, including Luxembourg and Cyprus.
He further noted that the additional evaluation of Cyprus’ anti-money laundering legislative framework should not constitute an additional condition for supporting Cyprus.
Frieden said Luxembourg is in favor of the application of existing strict rules, he added however that the arguments presented by some member states is due to their unwillingness to support Cyprus.
Nicosia dismisses that Cypriot banks engage in money-laundering activities. The government said that it has “nothing to hide”, ahead of an independent evaluation concerning the implementation of Cyprus’ anti-money laundering legislation, decided at a recent Eurogroup meeting. The evaluation will be carried out with the Council of Europe’s Moneyval involvement, under the supervision of the Central Bank of Cyprus.
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