BRUSSELS, May 13 (RIA Novosti) – Cyprus received the first installment of its multi-billion-dollar international bailout package on Monday with the delivery of 2 billion euros ($2.6 billion), the European Stability Mechanism (ESM) said on Monday.
The first tranche is being transferred in two separate installments: The first was transferred today, and the second, of up to 1 billion euros ($1.3 billion) will be transferred before June 30, 2013.
Both payments are to be made in cash, and are intended for “the general financing needs of the public sector (roll-over of maturing debt) and fiscal needs,” the ESM said in a statement.
“The loans granted by the ESM help to maintain financial stability in the euro area and buy time for Cyprus. This time enables Cyprus to undertake the reforms necessary to rebuild its economy on a sustainable basis,” ESM managing director Klaus Regling said.
After a year of negotiations, in April the Eurogroup and the International Monetary Fund approved a decision to allocate up to ten billion euros ($13 billion) in financial assistance to debt-stricken Cyprus during the next three years. The ESM, an intergovernmental institution that was set up to preserve the financial stability of the eurozone, is expected to provide up to 9 billion euros ($11.6 million) and the International Monetary Fund is to contribute around 1 billion euros ($1.3 million).
