June 25, 2012
Cyprus has become the fifth eurozone country to seek an international bailout amid mounting economic problems and fresh challenges for its banks after a credit-rating agency downgrade.
Bowing to eurozone pressure, the cash-strapped government of President Demetris Christofias said it had asked for help, just days before a deadline to recapitalise one of the country’s largest banks.
“The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure in the Greek economy,” the government said in a statement on Monday.
Jean-Claude Juncker, the Luxembourg prime minister, who heads the group of eurozone finance ministers, later responded by saying: “I welcome the formal application for financial assistance that I have received today from the Cypriot authorities. The Eurogroup will now swiftly examine the request and will provide a formal response to Cyprus.”
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