In all likelihood, draft legislation to approve memorandum of aid package for Cyprus makes it to Riigikogu in next week but one.
Estonia’s share in Cypriot aid: €16.74m
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According to head of parliamentary European affairs’ committee (ELAK) Arto Aas, the draft may be discussed next week in government, and in Riigikogu from April 15th to 18th.
The leading committee, in the Cypriot case, will be finance committee, which also presents the draft to parliament plenary meeting. From now on, ELAK will be receiving regular reports on progress with the programme.
According to Sven Sester, head of parliament’s finance committee, the precise timetable will depend on when Cyprus and EU’s troika come to an agreement on final details of the package. Initial agreement was made on March 25th already, whereupon specified conditions were announced on April 2nd. However, German ministry of finance told Reuters yesterday that the final memorandum will only be finished by April 9th.
It is known, by now, that lion’s share of the up to €10bn aid will come from the European Stability Mechanism (ESM), in which Estonia also participates. To finance its programmes, ESM issues securities backed by capital invested and further liabilities assumed by its owners – the eurozone governments.
A lesser part comes from International Monetary Fund (IMF). The IMF chief Christine Lagarde yesterday announced their share being €1bn, to be transferred over a period of 3 years.
Should the ESM share remain at €9bn, Estonia will have to lay €16.74m on the line, its load in ESM being 0.186 per cent for 12 years. Thereafter, the percentage will increase slightly.
On October 11th 2012, Estonia paid up its two initial ESM instalments, €29.76m, each. The next payments are written into this year’s budget.
Cyprus probably gets its first EU money transfer in the month of May. For that to happen, however, a whole lot of procedures will have to happen – first and foremost the ones inside members states, like the discussions in Estonian government and parliament.
These decisions taken, by end of April the board of ESM directors gathers for discussions of Cypriot package – consisting of 17 eurozone ministers of finance, plus observers allowed from European Commission and European Central bank.
Cheap EU loan
• According to Cypriot newspaper Cyprus Mail, the EU/IMF loan interests will come between 2.5 to 2.7 per cent, to be paid within 12 years with grace period of 10 years.
• As stated by Cypriot government press secretary Christos Stylianides, this loan’s conditions are better than with the €2.5bn gotten from Russia – with yearly interests of 4.5 per cent.
Source: Cyprus Mail