 |
| Gerry Rice, IMF Spokesman [PHOTO: UNifeed] |
Washington: The International Monetary Fund (IMF) on Thursday said the
agreement reached with this week to bail out Cyprus is unique, will be
difficult, but it has the advantage of not excessively burdening the Cypriot
taxpayer.
"So Cyprus was already facing a crisis situation. The
agreement reached in Brussels deals with these challenges up-front. It focuses
on dealing with the two problem banks and fully protecting insured deposits in
all banks through a clear strategy that ensures the debt sustainability and
does not excessively burden the Cypriot taxpayer," Gerry Rice, spokesman
for the IMF, said.
An IMF team is currently in Cyprus trying to complete
technical work on a program, which Rice said should be completed by early April.
IMF staff are expected to submit the program for approval by the IMF Executive
Board by the end of April.
On Thursday, Cypriot banks opened for the first time in two
weeks with capital controls put in place to prevent a panicked withdrawal of
deposits. The banks had been closed since March 16, when the Europeans
presented their initial proposal for Cyprus, which was reworked over the
weekend with a new agreement to close Cyprus Popular Bank, known as Laiki, and
impose bigger losses on uninsured depositors.
"Now, the adjustment that the plan will entail as the
financial sector downsizes and the economy adjusts accordingly will be a
difficult process for the Cypriot people over some period of time. We are
mindful of that, but it will ultimately result in an economic model that is
more sustainable and growth promoting," Rice said.
He said the agreement has the full support of the European
Central Bank, the European Commission and the IMF, known as the Troika.
"The agreement
that was reached in Cyprus was an agreement that has the full support of the
Cypriot authorities, the entire Eurogroup and the three institutions called the
Troika," he said.
When asked if the program with Cyprus would be the new model
for future agreements, Rice responded that the situation in Cyprus is unique.
"The case of Cyprus was very complex and unique in
nature. It would be difficult to extend the case to the rest of Europe or to
the world," he said.
During the briefing, the IMF also announced a new mission to
Egypt for talks about a program potentially worth $4.8 billion.
"We are now expecting a staff team to travel to Egypt
in the first days of April to continue to work with authorities on a possible
financial arrangement," Rice said.