World Bulletin/News Desk
Cyprus will require up to 10 billion euros ($13 billion) to refinance its banks, severely affected by the euro zone debt crisis and exposure to Greece, according to a draft deal with international lenders seen by Reuters on Friday.
The deal, contingent on approval from euro zone finance ministers and national parliaments, also states that the objective of the adjustment programme with the Mediterranean island is to achieve a primary balance of 4.0 percent of GDP in 2016.
"Noting that the European Banking Authority (EBA) deadline of 30 June 2012 has been missed by two banks and that public capital support has already been provided to one bank, while the State itself is under financial stress, a bank support facility of up to EUR billion is foreseen under the programme, which will also cover potential future capital needs, determined on the basis of a top-down capital exercise, as well as potential resolution costs," the draft deal obtained by Reuters states.
The exact amount per bank would be determined in a due diligence exercise, the report said, while brackets surrounding the recapitalization needs suggested it could be subject to change.
Earlier on Friday, Cypriot Central Bank governor Panicos Demetriades said the amount was an estimate, pending assessments from consultants expected next week.
The document also said the Cypriot central bank would direct all banking groups to increase their minimum Core Tier 1 capital ratio - a measure of financial strength - to 9 percent from 8 percent by Dec. 2013.
A process of on-going fiscal consolidation would seek to achieve a 4.0 percent of GDP primary balance in 2016, "and maintain such a level thereafter", the document stated.
Employees in the public sector would received a scaled reduction in pay from between 6.5 and 12.5 percent, it said.
Cyprus sought aid from the IMF and the EU in June after its banks reported significant losses on a restructuring of Greek debt earlier in the year.
Media reports have suggested that Cyprus's total bailout needs, including fiscal requirements, could reach 17.5 billion euros, virtually the equivalent of its gross domestic product.
Experts state that the crisis poses risks to the region, which is significant for oil production and exports in the world.
Federal Reserve removes word 'patient;' interest rate increase expected within months. Yellen says timing of rate rise 'not decided,' but will come anytime after April; holds current rates at 0 to 0.25 pct.
Many emerging-market currencies have fallen against the dollar in recent weeks
Anticipated Federal Reserve interest rate hikes making dollar strong against most emerging market currencies, Deputy Prime Minister Ali Babacan says.
European Statistical Agency says slight decline fuelled by drop in production of durable consumer goods.
EU will use all its foreign policy instruments to establish strategic energy partnerships with producing and transit countries.
Dollar strength and waning investor confidence are driving the lira lower
Greece has already received two bailouts totalling 240 billion euros but fellow euro zone member Ireland said last week that it would have to negotiate a third programme.
The Ukraine crisis has tested the loyalties of Bulgaria, a Balkan country with historical ties to Moscow and heavily dependent on Russian energy supplies.
Syria expels three United Nations aid workers hindering aid development in the country
Russia has overcome a "psychological barrier" and is ready to deepen its economic ties with China, Deputy Prime MinisterArkady Dvorkovich said
With Chancellor Angela Merkel's right-left coalition plus the opposition Greens, it was the biggest majority for any euro zone rescue package so far in the 631-seat chamber.
The agreement commits Tanzania, Kenya, Uganda, Rwanda and Burundi to cooperate with the United States in customs issues, ease red tape at borders, reduce customs wait times and harmonize trade standards.
Sri Lankan President Maithripala Sirisena has unnerved China with his re-examination of certain projects that Chinahas invested in, including a $1.5 billion "port city" project in Colombo.
EU energy chief Maros Sefcovic invited Russian Energy Minister Alexander Novak and his Ukrainian counterpart Volodymyr Demchyshyn for talks
Gazprom and Ukrainian state energy firm Naftogaz have accused each other of not sticking to agreements on gas supplies.