ECB's Asmussen sees Cyprus bailout by end-March

BERLIN Mon Feb 11, 2013 12:58pm IST

European Central Bank (ECB) Executive Board member Joerg Asmussen smiles during an interview with Reuters in Berlin June 19, 2012. REUTERS/Pawel Kopczynski

European Central Bank (ECB) Executive Board member Joerg Asmussen smiles during an interview with Reuters in Berlin June 19, 2012.

Credit: Reuters/Pawel Kopczynski

BERLIN (Reuters) - European Central Bank executive board member Joerg Asmussen believes an aid package for Cyprus will be ready by the end of next month, he told the German business daily Handelsblatt in an interview published on Monday.

"I expect the aid program for Cyprus will be in place by the end of March," he said, adding that politicians in his native Germany should not try to delay a controversial decision on Cyprus until after a German federal election in September.

"There must be no doubt about this: if Cyprus gets no external help, it will slide into default," said Asmussen.

He also warned that failing to help a systemically relevant euro zone country would "put at risk progress made last year on the euro crisis - and that would have high financial and political costs".

Politicians in Germany's governing alliance and the opposition are hesitant about granting Cyprus a 17.5 billion ($24 billion) bailout because of its status as a tax haven for rich Russians, many of whom use it for money-laundering.

Asmussen said an aid package for Cyprus would be "no one-way street" and the government in Nicosia would have to fulfill "tough conditions" including scaling down its financial sector and introducing more banking transparency.

Cyprus will be high on the agenda of a meeting of euro zone finance ministers in Brussels on Monday.

(Reporting by Stephen Brown)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage