Cyprus Mail www.cyprus-mail.com
Friday, April 12, 2013
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How much worse can it possibly get? From a bailout of €17.5b only four months ago, Cyprus now needs €23b, as state blames its predecessors By Elias Hazou
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HE government yesterday put the blame squarely on the previous administration for the spectacular increase in the bailout cost for Cyprus within the space of a few months. In doing so, the DISY-led administration appeared to be confirming a draft assessment prepared by the European Commission, revealed by Reuters on Wednesday, according to which Cyprus’ total financing needs now stand at €23bn. By contrast, the preliminary bailout agreement struck between international lenders and the previous administration last November was thought to be worth €17.5bn to which international lenders would contribute €10 billion and Cyprus the remainder. Now Cyprus must stump up €13 billion. At a news briefing yesterday, government spokesman Christos Stylianides pointed an accusing finger at the previous government of Demetris Christofias. “Who is responsible? How did we get from there to here? It was the fear of taking responsibility and a total lack of decisive action on the part of the previous government,” he said. Asked what accounted for the additional €5.5bn on the tab, Stylianides said this
“clearly has to do with the banking sector. “When you have so many withdrawals from Cypriot banks, unfortunately that’s how you get to the new figure,” said Stylianides. He was evidently alluding to the flight of billions of euros from Cyprus since January when talk of a possible haircut on deposits picked up pace. He went on to say that the €23bn number “has been taken into consideration, and that is why we proceeded to the next phase of decisions at the Eurogroup of March 24.” The European Commission document said that of the total financing needs of €23bn between the second quarter of 2013 and the first quarter of 2016, the eurozone bailout fund will provide €9bn, the International Monetary Fund €1bn and Cyprus itself will generate €13 billion. Cyprus would raise €10.6bn from the winding down of Laiki Bank and the losses imposed on junior bondholders and the deposit-forequity swap for uninsured deposits in the Bank of Cyprus. It said also Nicosia was “committed” to sell excess gold reserves to raise about €400 million, and would raise a further €600 million over three years from hiking the corporate income tax
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MOUNTAIN OF OLD TYRES WORRIES DALI RESIDENTS
Tens of thousands of old tyres have piled up in a yard in Dali as the owners wait for machinery to begin recycling them. The company has been given until May 30 to start operations (Christos Theodorides) SEE STORY PAGE 3
‘Classy’ Dubai police add £360,000 Lamborghini to fleet IN a city of boundless bling, Dubai police are in hot pursuit after adding a £360,000 Lamborghini to their fleet. The sports car, painted in the green and white livery of the Dubai force, will probably not be roaring after lawbreakers. Instead, it will mostly be dispatched to tourist areas to show - in the words of deputy police director General Khamis Matter al-Muzaina “how classy Dubai is”. Local media reports said the Italianmade Lamborghini Aventador is the crown jewel of a wider upgrade in
Dubai police wheels. The force is also adding some American Camaros.
BRASH PLANS Dubai is seeking to show that it has rebounded from its debt crisis with brash plans which also include the world’s largest Ferris wheel and a satellite city named after the city-state’s ruler. Nonetheless, in a place where petrol is cheaper than drinking water, authorities genuinely face significant chal-
lenges to curb road accidents caused by speeding, Sky News reported. Last year, official figures put road deaths at 122, with 2,161 injuries, many of which occurred on the emirate’s notorious Sheikh Zayed highway. Around 15 per cent of traffic fines issued in Dubai every day are for driving at speeds in excess of 130mph, police figures released in March showed. Last year, Dubai police announced they had issued 67,000 traffic fines in one month alone, 2,000 of which were for reversing on motorways.