Cyprus bailout cost jumps from €17bn to €23bn

Julian Harris
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THE CYPRIOT government now needs to find €23bn (£19.6bn) to fix its financing woes, the cost of a bailout having spiralled upwards.

Cyprus had originally been asked to find around €7bn, with its international lenders – the European Union and International Monetary Fund – stepping in with a further €10bn.

Yet a spokesman for its government, Christos Stylianides, admitted yesterday: “It is a fact the memorandum of November talked about €17.5bn in financing needs. [But] it has emerged this figure has become €23bn.”

Stylianides blamed the previous administration’s indecision for the escalating costs.

The ongoing saga of Cyprus’s bailout will top the agenda of a two-day meeting of EU finance ministers – known as the Eurogroup – that starts today in Dublin.

While the programme has already been agreed, debate over the details is likely to dominate the informal Eurogroup sessions.

Cyprus is expected to sell €400m worth of its gold reserves, and will have to raise corporate tax and capital gains tax rates at a time when its economy is forecast to contract more than 12 per cent in the next two years.