EU releases bailout funds for Cyprus

The European Union has handed over the first installment of a 10-billion-euro bailout to Cyprus as part of the aid package agreed earlier this year.

The bloc’s European Stability Mechanism said in a statement on Monday that Cyprus received two billion euros in loans in exchange for breaking up the Cypriot banking sector.

The second release of “up to one billion” will be transferred before 30 June 2013, the statement added.

The troika of international lenders — the IMF, the European Commission and the European Central Bank (ECB) — agreed in March to give 10 billion euros ($13.1 billion) to Cyprus.

The bailout would save Cyprus from bankruptcy and possibly guarantee its future in the eurozone.

The announcement came after eurozone finance ministers met in Brussels to approve bailout payments for crisis-hit Cyprus and Greece.

The ministers are also expected to approve the bloc™s latest bailout payment to Greece. The debt-stricken country is expected to receive 7.5-billion euros in the latest payment of its 240-billion-euro bailout.

Athens needs the money to pay wages, pensions and bond-holders, as it still struggles to reform its economy.

Europe plunged into financial crisis in early 2008. The worsening debt crisis has forced the EU governments to adopt harsh austerity measures, triggering protests against spending cuts in many European countries.

SAB/SS