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Euro zone backs 10 billion euro Cyprus bailout

Friday, April 12, 2013 - 01:54

April 12 - Cyprus' messy bailout tops the agenda on day one of a two day EU finance ministers meeting in Dublin. Joel Flynn reports.

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Calm on the streets of Cyprus and relief as capital controls there are eased. Though as Nicosia's residents fret over their money, some worry things could still get worse. Cyprus says its financing needs are around 6 billion more than expected -- due to its weakening economy. But euro zone finance ministers meeting in Ireland said the bailout money could not be increased above 10 billion euros. Ireland's finance minister Michael Noonan said he was confident the issue would be resolved. (SOUNDBITE)(English) IRELAND'S FINANCE MINISTER MICHAEL NOONAN SAYING: "Cyprus is pretty well resolved. I think the big surprise is it stabilised so quickly after the new arrangements were made. They are going about their business and it wouldn't be seen as a crisis issue at today's meeting." Officials meeting in the Irish capital also agreed to extend loan deadlines for Ireland and Portugal by another seven years. But German reluctance over euro zone banking reform is proving to be much less clear cut. Europe's largest economy is worried it will be left on the hook to finance an endless series of banking bailouts. Euro zone-wide measures aside, some say the biggest threats are still domestic. IdeaGlobal's Michael Gallagher. SOUNDBITE: IdeaGlobal Managing Director, Michael Gallagher, saying (English): "We feel that we'll end up with an unstable political situation in Italy, which can cause a crisis into the summer. Secondly, there's an increasing risk of major social unrest in Spain given the continued climb in unemployment, recession and restructuring that's occurring in Spain, and those kind of politically driven crises are difficult to deal with." This weekend's meeting will see the stimulus versus austerity debate continue. It's also expected to be a hot topic at the G20 finance ministers meeting next week.

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Euro zone backs 10 billion euro Cyprus bailout

Friday, April 12, 2013 - 01:54