IMF to return to Cyprus this week for aid talks

WASHINGTON Wed Nov 7, 2012 12:01pm EST

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WASHINGTON Nov 7 (Reuters) - The International Monetary Fund on Wednesday said it would return to Cyprus this week to resume talks about a potential rescue package for the indebted island nation which has been burned by Greece's debt meltdown.

"On the basis of progress made by the authorities since July, an IMF mission is scheduled to return to Cyprus this week," an IMF spokesperson said in a statement.

The comments echoed a statement from the Cypriot government earlier, which said talks would resume on Friday.

Cyprus, one of the smallest nations in the euro zone, requested financial aid from its European Union partners and the IMF in June after its two largest banks needed state support following a writedown in Greek debt, and to plug its own fiscal gaps.

The lenders first proposed an austerity package in July, but so far has not been able to agree with the government on certain measures.

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