International Monetary Fund Managing Director Christine Lagarde has indicated that a decision regarding potential financial assistance to Cyprus may be taken by IMF's Executive Board in the coming weeks.
Her comments follow a decision by Eurogroup to endorse the bailout plans presented by Cypriot authorities. Plan calls for closure of Cyprus Popular Bank or Laiki and forces losses on bond holders and savers with uninsured deposits above EUR 100,000.
"The staff teams of the IMF and the European partners currently in Cyprus will now work to complete the technical details," Lagarde said. "Based on this and final agreement of the mission in Cyprus, I expect to make a recommendation regarding potential financial support from the IMF to the Executive Board in coming weeks," she said.
Lagarde said the plan provides a durable and fully financed solution to the underlying problems facing Cyprus and places it on a sustainable path to recovery.
Eurogroup President Jeroen Dijsselbloem said the bail-in of unsecured depositors from Laiki will contribute around EUR 4.2 billion to the bailout program. Cyprus' international creditors have offered EUR 10 billion in aid, if the country adheres to the bailout conditions.
In a statement earlier today, Eurogroup said Laiki will be split into a good bank and a bad bank. While the good bank will be folded into the Bank of Cyprus, the bad bank will be run down over time.
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