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IMF will lend 1 billion euros to Cyprus

FXstreet.com (Barcelona) - The IMF announced on Wednesday that its contribution to the Cyprus bailout would amount to 1 billion euros. It has also presented the harsh conditions of the aid.

These include increases in taxes: the corporate tax is to be raised from 10% to 12.5%, while the income tax from 15% to 30%. Additionally, Cyprus is required to introduce more austerity measures in order to reach a 4% GDP surplus target in 2018.

"There will be protection for the most vulnerable groups. The social welfare system will be reviewed to streamline administration costs, minimize the overlap of existing programs, and improve their targeting to ensure that public resources reach those in need," IMF chief Christine Lagarde said on Wednesday. She also added that the funds should be approved by the IMF board at the beginning of next month.

You can read IMF head Christine Lagarde and European Commission Vice-President Olli Rehn’s joint statement on the Cypriot bailout here.

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