Business Irish

Sunday 18 March 2018

Noonan and other European ministers on way to Brussels for special meeting on Cyprus bailout

Wolfgang Schaeuble: German Finance Minister will vote to help Cyprus
Wolfgang Schaeuble: German Finance Minister will vote to help Cyprus

FINANCE Minister Michael Noonan will travel to Brussels tomorrow after eurozone ministers agreed to hold a special meeting after an EU leaders' summit to discuss a financial bailout of Cyprus, signalling growing momentum for a deal.

The meeting, which will come both after the summit and a mission by the troika of international lenders to Cyprus, raises expectations that the eurozone is close to sealing a package of aid that the Mediterranean island asked for last June.

Cyprus is expected to agree to hike corporation tax to Irish levels of 12.5pc from the current rate of 10pc as part of the bailout.


"Friday 5pm (1600 GMT) extra Eurogroup on Cyprus," Dutch Finance Minister Jeroen Dijsselbloem, who chairs the meetings, said on his official Twitter feed.

Crippled by its exposure to Greece, Cyprus needs funds from the eurozone to recapitalise its banks and to finance the government over the next three years.

Without help, Cyprus would slide into default, risking the eurozone's credibility and threatening progress made last year in convincing investors that the bloc will not be overwhelmed by its debt problems.

Initial estimates on the size of the bailout were as much as the whole Cypriot economy produces in a year, some €17bn, raising doubts whether the eurozone member state would be able to pay back the money.

But officials said this week that Cyprus may require a smaller bailout than that because it could raise money from a levy on deposits and other taxes.

The international troika of lenders, the European Commission, the ECB and the IMF, have been in Cyprus and told eurozone finance ministers enough progress had been made in the capital, Nicosia, to hold the Eurogroup meeting in Brussels, officials said.

Eurozone officials have said they expected a decision on a bailout for the Mediterranean island to be taken before the end of the month.

German Finance Minister Wolfgang Schaeuble has told conservative politicians that Germany's Bundestag lower house of parliament would vote on aid for Cyprus before a wider European decision, but he did not set a date. (Additional reporting Reuters)

Irish Independent

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