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.
Millions of people around the world aim to go to college or university in order to land themselves a well paying job at the end but this Business Insider article shows how some don't nearly pay as much as we think
The court said the decision "breached the law" because of procedural flaws, according to a copy of the verdict.
Global economic trend does not augur well for developing countries: UN Conference on Trade and Development report
"We will look carefully at tax rulings issued by Luxembourg to GDF Suez," Vestager said in the Commission statement.
The Bank for International Settlements (BIS) -- dubbed the central bank of central banks -- said a gauge of Chinese debt had hit a record high in the first quarter of the year.
Civil claims involve bank's mortgage activities
Adeosun said that the bonds are expected to go on sale in December, with the proceeds channelled into capital projects.
May also ruled out a new general election anytime soon, saying Britain needed stability following June's referendum vote to pull out of the European Union.
A 2nd airport would put Rwanda on par with its regional peers, as more tourists flock to East Africa
Country GDP shrank by 2.06 percent in second quarter of 2016
Afghan traders worried fruit exports are rotting after two-week border closure
Foreign trade minister says Trans-Atlantic Trade and Investment Partnership negotiations should stop
Overnight lending rate gets cut by 25 points to 8.50 percent; overnight borrowing rate remains unchanged at 7.25 percent
"It appears that a programme of public spending in Germany would not be the most appropriate tool to help give a strong stimulus to the international economy," the central bank said following a study into the issue.
The 0.3 percent quarterly gain was in line with average forecasts compiled by data company Factset.