Cyprus’ president is asking EU leaders to completely alter the country’s $13 billion bailout.
This is according to an exclusive report from the FT’s Peter Spiegel.
President Nicos Anastasiades warned in a letter that the small island nation might not be able to meet the terms of the rescue agreement because it had harmed the country’s economy too much.
“[T]he economy is driven into a deep recession, leading to a further rise in unemployment and making fiscal consolidation all the more difficult,” Mr Anastasiades wrote to the heads of three EU institutions and the International Monetary Fund. “I urge you to review the possibilities in order to determine a viable prospect for Cyprus and its people.”
Mr Anastasiades has asked EU leaders to unwind the complex restructuring and partial merger of its two largest banks, which account for 80 per cent of the domestic banking sector, backed by further eurozone loans.
A senior official told the FT that failure to prepare for the bailout — which forced the closure of its second-largest bank, restructured its largest bank, and took a haircut from depositors — was partially the fault of the Cypriot government.
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