June 27, 2012 / 2:54 PM / 6 years ago

Euro group details aid plans for Spain and Cyprus

BRUSSELS (Reuters) - Euro zone finance ministers welcomed Spain’s request for assistance from the euro zone’s rescue funds on Wednesday and said it was likely to require between 51-62 billion euros as well as an additional “safety margin”.

In a statement, the Euro group said that once the final amount was determined, the aid would be paid from the temporary EFSF fund before being moved to the permanent ESM bailout mechanism. It said the final amount would be “well within” the 100 billion euro limit set by the Euro group.

The funds will be paid into the Spanish government’s bank restructuring fund, known as the FROB, but the Spanish government “will remain fully liable and will sign the memorandum of understanding”, the Euro group said.

In a separate statement released at the same time, the Euro group welcomed Cyprus’s request for aid and said it too would shortly receive assistance from the EFSF and/or the ESM, once an assessment of its needs was complete.

In exchange for the assistance, which is expected to amount to about 10 billion euros, according to officials, Cyprus will have to commit to budget cuts and structural reforms, as well as steps to strengthen its banking and financial sector.

Writing by Luke Baker; editing by Rex Merrifield

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