The debt stricken Cyprus receives $13 billion as its first installment of financial bailout package from the euro group. Yesterday after the start of a two-day meeting in Brussels, the finance ministers of the 17 EU nations using the single currency released $2.6 billion (2 billion euros) for Cyprus from the rescue package agreed in March and offered to provide another $1.3 billion (1 billion euros) before the end of June.
"The euro group was satisfied that Cyprus has implemented all prior actions as agreed in the memorandum of understanding with its international creditors. As there are shortcomings in the island nation's compliance with the measures agreed to combat money laundering, their measures to control it will be closely monitored," said president of the group Jeroen Dijsselbloem.
He also said the euro zone finance ministers want Cyprus to "proceed with the implementation of the agreed adjustment programme in a steadfast manner."
In return for the bailout package from the EU and the International Monetary Fund (IMF), Cyprus had agreed to raise $16.9 billion (13 billion euros), mainly to restructure the country's stricken banking sector, by charging a levy up to 60 per cent on all deposits above 1,00,000 euros in the Bank of Cyprus, the country's largest bank. Meanwhile, The Laiki Bank - which is the second largest bank of the country- will be dissolved and its "good" assets will be folded into the Bank of Cyprus.
The IMF will contribute $1.3 billion (1 billion euros) to the bailout package. Meanwhile, the finance ministers also agreed to release the latest tranche of $9.75 billion (7.5 billion euros) from the second rescue package of $169 billion (130 billion euros) for Greece, which was approved by the EU and the IMF in March last year.
As we know, Greece has been rescued from bankruptcy in May 2010 with the support of a $143 billion (110 billion euro) financial lifeline from the EU and the IMF. It is the first euro zone nation to receive a bailout.
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