Eurozone finance ministers set to debate Cyprus bailout

PanARMENIAN.Net - Eurozone finance ministers will meet in Brussels later to discuss how to fund a potential 17bn-euro ($22bn) bailout for Cyprus, according to BBC News.

Germany has pushed for depositors in Cypriot banks to help pay for the rescue, a process known as a "bail-in". But Cyprus fears a bail-in could spark a withdrawal of funds from the country, making its economic situation worse.

Meanwhile, Portugal is also seeking to renegotiate parts of its own bailout at the same meeting.

The Eurogroup meeting is expected to assess the rescue of Portugal, with the possibility that the country will be given slightly longer to pay back the loans it has already received.

The Republic of Ireland may also be granted similar leniency on its bailout.

Cyprus's newly elected President, Nicos Anastasiades, has promised to secure a financial bailout, saying his top priority is to restore Cyprus' credibility.

EU Commissioner for Economic Affairs Olli Rehn warned over the weekend that Cyprus leaving the eurozone remained a dangerous possibility.

"Even if you come from a big EU country, you should be aware that every member of the eurozone is systemically relevant," Mr Rehn was quoted as saying in German newspaper Der Spiegel.

"If Cyprus becomes disorderly insolvent, it is very likely that would lead to it exiting the eurozone." Although Cyprus will be discussed at the latest meeting, a decision is not expected until later in March.