November 29, 2012 - 17:13 AMT
PanARMENIAN.Net - Cyprus could agree a bailout deal with eurozone finance ministers by mid-December and get a first tranche of funds to shore up its banks by the end of January, its finance minister said on Thursday, according to Reuters.
Vassos Shiarly told lawmakers a preliminary agreement had been reached with international creditors, which needed to be supplemented with a definitive assessment of the banks' recapitalization needs.
That assessment will be ready by Dec 7, he said.
"There is a preliminary deal with the troika," Shiarly said, referring to lenders from the International Monetary Fund, the European Central Bank and the European Commission. "(But) I anticipate discussions over the next few weeks will be difficult, perhaps more so than before."
Shiarly said authorities were discussing an interest rate of 2.5 percent with lenders, which he described as "very good" under the circumstances.
Lenders say a final agreement cannot be reached until there is more clarity on the capital needs of the island's banks.
Shiarly, speaking to parliament's finance committee, avoided specifying the banks' needs, saying these would be assessed by consultants.
"Many figures have been speculated, from 5 billion to 15 billion euros. Let's wait for the assessment, and even then, that could change," he said, citing the example of Spain, where recapitalization assessments have moved significantly lower.
A working scenario was a conclusion on Cyprus by mid-December, with up to six weeks for a deal to be ratified by the national parliament. "That would bring us to the end of January for the first tranche," Shiarly said.
Once agreed, the bailout would make Cyprus the fourth eurozone nation to get a sovereign rescue after Greece, Ireland and Portugal. Spain has been granted financial aid to recapitalize its banking sector, but Madrid has not so far asked for money to cover state needs.