Bank of Cyprus must exit resolution, says Eurogroup

Eurozone ministers want to see the island’s largest lender, Bank of Cyprus, exit its resolution status as early as possible, with a commitment that the island’s government, too, will keep to the bailout plan and implement reforms and cutbacks.
Euro area Finance Ministers said that “a determined implementation of the Cypriot adjustment programme, as agreed between Cyprus and its international lenders, is indispensable.”
The Eurogroup was briefed by the Troika of international lenders (EU, ECB, IMF) and the Cypriot Minister of Finance Haris Georgiades on the state of play on the implementation of the MoU agreed last March.
The Eurozone ministers also discussed a letter sent by Cyprus President Nicos Anastasiades to the heads of the European Commission, the European Central Bank and the IMF outlining practical problems arising from the implementation of the MoU.
The letter focused mainly on the problems facing Bank of Cyprus which assumed the 9 bln euros Emergency Liquidity Assistance (ELA) of the isalnd’s second largest bank, Popular Laiki, which is being liquidated and its assets and workforce burdened onto Bank of Cyprus.
"We are unanimous that a determined implementation of the programme is indispensable. We agreed that the BoC needs to brought out of resolution as quickly as possible and the best way to achieve this is through the implementation of the financial strategy on the restructuring of the financial sector that was agreed between Cyprus and the programme in the MoU," Eurogroup President, Dutch Finance Minister Jeroen Dijsselbloem has said.
Dijsselbloem also said "swift and determined progress on the part of the Cypriot authorities with the implementation of the financial sector strategy as agreed in the MoU is key to bringing the bank of Cyprus out or resolution and eventually lifting capital controls at a pace that is optimal for the economy."
The Eurozone Ministers also reached an agreement on the main features of the European Stability Mechanism direct recapitalization instrument .Some 60 bln euros will be available for the direct recapitalisation of banks, out of the 500 bln of the ESM.