REPORTERNET.COM

The eurozone member is already under pressure from Brussels to slash spending and boost revenues as the government's budget deficit is almost double the European Union's ceiling of 3.0 percent of gross domestic product.
The European Commission predicts it will be near 5.0 percent in 2012 and, unless tough action is taken, the Mediterranean island faces financial sanctions.

Even if the government puts a lid on the deficit, it lacks the financial clout to support the banks, which need an extra 3.6 billion euros in capital as a buffer laid down by the European Banking Authority (EBA) to weather the crisis.
Cypriot banks are badly exposed to toxic debt in Greece, and face a write-down of Greek bonds a so-called haircut, of 50 percent.
As a bank's assets fall in quality, regulations on ratios of risk to shareholders' funds may require a strengthening of shareholder funds, or else the lender concerned has to find ways of reducing the risks it takes on, typically be reducing lending.
Economist Fiona Mullen said although Bank of Cyprus may be able to cover the 1.5 billion euros required, Marfin Popular Bank will struggle to raise the additional cash needed.
"Marfin at the very least will have to beg for money from the government, which doesn't have that kind of spare cash," Mullen told AFP.
"An EU support mechanism is inevitable whatever the government does because the two junk-rated banks will not be able to raise all of the 3.6 billion in capital by June 2012 that has been preliminarily demanded by the European Banking Authority," she added.
Mullen said BoC could use about 890 million euros in contingent convertible bonds (CoCos), which would reduce its capital requirement to an estimated 600 million, of which it is trying to raise 400 million euros in a share issue.
But Marfin has only 65 million in CoCos.
Even after including their convertible bonds, Marfin still has to find two billion euros, according to the preliminary figures.
"So the only option will be to ask the EU for assistance," said Mullen.

(source: Agence France-Presse)