Cyprus is now 'very close' on a bailout

Posted: November 24, 2012

NICOSIA, Cyprus - Cyprus is "very close" to signing an agreement with potential creditors for a bailout to support its troubled banks and pay its bills, the crisis-hit country's president said Thursday.

President Dimitris Christofias said that the "very limited" number of differences that remain could be bridged "very soon."

The statement comes a day after Cypriot officials wrapped up a third round of negotiations with officials from the European Commission, the European Central Bank and the International Monetary Fund, collectively known as the troika.

"Following tough negotiations with the troika and always bearing in mind the difficult situation that our country now finds itself in, we are very close to signing a memorandum with the troika," Christofias, who is in Brussels for a European Union budget summit, said in a written statement.

Christofias didn't specify which issues remain unresolved, but Cypriot officials, speaking anonymously because of the sensitivity of the negotiations, said they include how proceeds from offshore natural gas finds are managed, the privatization of profitable, state-owned companies, and the state's contribution to workers' pension fund.

The statement was greeted with guarded relief in the country that was hit on Wednesday by another two-notch credit rating cut. Ratings agency Fitch sank Cyprus deeper into junk status amid worries over a weakening economy that the Cypriot finance ministry projected will shrink by 3.5 percent next year.

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