ECB imposes bailout deadline on Cyprus

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FXstreet.com (Barcelona) - The European Central Bank announced on Thursday that it would cease providing financial support to Cypriot banks next Monday, unless the government in Nicosia reaches an agreement on the rescue program.

According to the official release: "The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance ( ELA ) until Monday, 25 March 2013. Thereafter, Emergency Liquidity Assistance ( ELA ) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks."

In case of the Cypriot government's failure to strike a bailout deal by the appointed date, the country would only be able to receive financial support if the IMF and the Eurozone establish a program guaranteeing the solvency of affected banks.

As Nicosia decided to maintain its banks closed until Tuesday March 26, the Eurogroup president Jeroen Dijsselbloem declared today that the situation in the country is posing a systemic risk for the stability of the Eurozone.



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This article appears in: Investing , Forex and Currencies

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