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Westerwelle: Cyprus must reform for bailout
Photo: DPA

Westerwelle: Cyprus must reform for bailout

Published: 21 Dec 2012 10:29 GMT+01:00
Updated: 21 Dec 2012 10:29 GMT+01:00

German Foreign Minister Guido Westerwelle said on Friday that Europe is "ready to help" Cyprus tackle its debt troubles - but only if the country commits to key structural reforms and an austerity budget.

Westerwelle told public broadcaster ARD that there are mechanisms in place to support Cyprus, but said the country must be "really serious" about reforms to receive that aid.

"On that front, certainly, many further steps are still needed," he said.

The foreign minister's comments come just hours after US ratings agency Standard & Poor's slashed Cyprus's credit rating by two notches, to CCC+.

In June, the country formally requested bailout funding from its eurozone partners, with Finance Minister Vassos Shiarly estimating that Nicosia would need about €17.5 billion to stay afloat.

Meanwhile, there are growing fears that the country will be unable to shoulder its debts even after adopting the necessary reforms. The International Monetary Fund is said to be pushing for a write-down of Cypriot debt holdings, according to a report published Thursday in the Süddeutsche Zeitung.

The IMF wants this "haircut" in exchange for its share of bailout money for Cyprus, the paper wrote.

Shiarly has denied talk of a debt write-down, however - and ECB executive board member Jörg Asmussen, a senior German economist, also dampened speculation, saying it is still unclear how much money Cyprus will actually need.

"We won't have the final numbers until mid-January," Asmussen told ARD. He also warned that more measures to help Cyprus may be needed if the country's debt burden proves to be unsustainable.

DAPD/DPA/The Local/arp

The Local (news@thelocal.de)

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Your comments about this article

10:48 December 21, 2012 by Berlin fuer alles
Who died and left that idiot in charge? I thought the Eurozone and the EU was a community and not a common community of puppet states under Dr. Merkyl and Mr. Hyde.
20:59 December 22, 2012 by iseedaftpeople
is it just me, or does that picture look like Westerwelle is about to break into a fabulous show-stopping dance routine with all the bells and whistles?
00:05 December 23, 2012 by Wolfgang Fritz
the picture looks like he is practicing martial arts and flicking the boot.
10:29 December 23, 2012 by Berlin fuer alles
He is doing the YMCA dance http://youtu.be/uAYHQWz3i7I
13:06 December 26, 2012 by raandy
Westerwelle now believes he is the spokes person for the EU or he believes that Germany is the EU, either way he should temper his remarks.

Ya and whats with that picture? not very flattering for most but maybe correct for him.
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