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Cyprus’s bailout to reach €23 billion

FXstreet.com (Barcelona) - According to Cyprus’s international creditors, the final figures of the rescue package would climb to €23 billion, exceeding the €17 billion previously estimated and representing an increase of 35% over the initial calculations. Subsequently, the island must now cover €13 billion instead of the initial €7 billion. The ‘Troika’ will provide with the rest of the funds, worth €10 billion.

Nicosia will now need to contribute with €10.6 billion, including the deposits’ haircuts, almost doubling the depositors’ burden as a consequence.

In addition, higher taxes (€600 million), privatizations (€1.4 billion) and the likeliness of selling gold reserves (around €400 million) will cover the rest of the funding. The latter still needs confirmation, according to the central bank’s spokeswoman Aliki Stylianou.

According to international creditors, Cyprus’s economy would contract 8.7% in the present year and 3.9% during 2014, recovering the growth path in 2015, where it is expected to expand 1.1% and 1.9% in 2016.

Regarding the debt-to-GDP ratio, it would rise to 109% in 2013, 123% during the next year and 126.3% in 2015.

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