IMF to assist Cyprus
Washington – The head of the International Monetary Fund (IMF) said on Wednesday that the global lender was ready to join European countries in providing a financial aid package for Cyprus.
IMF managing director Christine Lagarde said in a statement that the Fund had received an invitation from Cyprus authorities to participate in the external financial assistance to contain the risks to the Cypriot economy.
“Today, the IMF received an invitation from the Cypriot authorities to participate in the external financial assistance to contain the risks to the Cypriot economy,” said Lagarde.
Cyprus said on Monday that it was applying for a bailout from the European Financial Stability Fund (EFSF) and the European Stability Mechanism (ESM) to help recapitalise its banking system and refinance its sovereign debt.
“Cyprus Republic has today notified the competent European Authorities of its decision to submit an application to the Eurozone member countries for economic support by EFSF/ESM,” an official announcement on Monday said.
It added that the purpose of the funds sought is to contain risks to the Cyprus economy, “especially the negative repercussions resulting from the banking system because of its extensive exposure to the Greek economy”.
Cyprus has to raise at least 1.8 billion euros (US$2.25 billion) by the end of June to recapitalise Cyprus Popular Bank, the second largest lender of the island.
“We stand ready to join the efforts of our European partners to help Cyprus return to stable and sustainable economic growth and restore a solid financial sector,” Lagarde said.
She added that the IMF would send a team to Cyprus as soon as possible in preparation for discussions on an economic program that will help the country meet the economic challenges it is facing. – BuaNews-Xinhua
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