Merkel: no cash for Cyprus if it fails to reform

Julian Harris
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GERMAN Chancellor Angela Merkel maintained a hard line on Eurozone bailout programmes yesterday, insisting that the Cypriot government must agree to significant reforms to qualify for a rescue package.

Speaking after separate talks with Malta’s Prime Minister, Merkel said that a resolution for Cyprus still has hurdles to overcome.

“There can be no special conditions for Cyprus because we have common rules in Europe,” Merkel insisted, adding that the troika of lenders – the European Union, European Central Bank and International Monetary Fund (IMF) – should talk to the Cypriot authorities. “We are far from the end of talks.”

Maltese PM Lawrence Gonzi endorsed the privatisations that Cyprus is expected to undertake – even though Cyprus’s outgoing communist President, Demetris Christofias, is ardently opposed to the measures.

“Privatisations were one of the key elements that allowed Malta to move forward,” Gonzi said.

Rainer Bruederle, parliamentary leader of the FDP, has said the German house could refuse to vote through aid for Cyprus.

Earlier in the day economic data revealed that German industrial output edged up in November, but not by as much as hoped.

Output edged up by just 0.2 per cent on the month. “This is the final piece of evidence of an entire batch of industrial data showing that the German economy has slipped into contraction in the fourth quarter,” said ING’s Carsten Brzeski.