ESM board approves updated MoU for Cyprus

The Board of Governors of the European Stability Mechanism (ESM) approved in Vilnius on Friday the updated Memorandum of Understanding for Cyprus, which clears the way for the disbursement of €1.5 billion, the second tranche of the Cypriot financial assistance programme.

In a press release the ESM said that this disbursement is expected to be formally decided by the ESM Board of Directors.

“Upon approval, the amount will be used for the recapitalisation of the cooperative banking sector” the press release said.

“This tranche will help Cyprus to rebuild a healthy, viable and properly working banking sector, which is crucial to stabilising the economy”, Klaus Regling, the ESM Managing Director, has noted.

The press release said that the ESM Board of Governors decided on 24 April 2013 that Cyprus will receive financial assistance from the ESM of up to €9 billion in the next three years.

The first tranche of the programme, in the amount of €3 billion was disbursed in two steps in May and June.

After the disbursement of the second tranche, €4.5 billion of ESM financial assistance will remain available for Cyprus.