30th March 2013

Eurogroup reached an agreement with Cyprus

On March 25 the Eurogroup reached a political agrément with the Cypriot authorities on the key elements necessary for a future macroeconomic adjustment programme. Two of Cyprus' largest banks – Laiki and Bank of Cyprus – will undergo restructuring right away. Laiki will be resolved immediately. This will be done by splitting it into a "good bank" and a "bad bank". The bad bank will be run down in the following period of time and the good bank will become a part of Bank of Cyprus. Bank of Cyprus will be recapitalised through a conversion of uninsured deposits over €100 000 to equity .

Macroeconomic situation of Cyprus should be improved by a wide variety of structural reforms, fiscal consolidation and privatisation. The macroeconomic programme should be finalised in April 2013 and its finalisation is a vital condition of the financial assistance provided by the European Stability Mechanism, which is estimated to be up to 10 billion euro.

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Members of the American Chamber of Commerce in the Czech Republic