The Greek Cypriot administration is currently negotiating for bailout funds of nearly 17 billion Euro.
The EU has agreed in principle to the bailout fund but not the amount or the conditions.
Over the weekend, the IMF has proposed that only 10 billion Euro is lent to South Cyprus and that they find the rest elsewhere. It is understood that President Anastasiades will be looking to Greece for a helping hand. He is currently in Greece on a political visit.
The Troika (EU, IMF and World Bank) also want to impose a number of painful measures as conditions for the funds.
They are looking for a major privatisation programme for State owned enterprises, a 40% shrinkage in the banking sector, and corporate tax to rise from 10% to 12.5%. In addition they want personal tax for high income earners to rise from 35% to 40%
All of this is in addition to the money laundering investigation they are demanding. The German Foreign Minister Wolfgang Schauble, in a newspaper article in Der standard, has demanded that this be carried out.
It is claimed in the Greek press, that Anastasiades is looking to the Greek Prime Minister Andonis Samaras to provide a 3 billion Euro facility. In addition his officials are looking for further loans from Russia.
Archbishop Chrysostomos, head of the Greek Orthodox Church, has also entered the stage by saying that if the EU partners want to help South Cyprus, then that help would be gladly accepted. If however their purpose was to destroy South Cyprus, then “we should go back to the Lira we had in the past”. The Archbishop also disclosed that he is looking to sue the current head of the Central Bank as well as members of the previous government for allowing the banks to get into such poor condition.
The Church is a major shareholder in the Hellenic Bank.
