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Financial Mirror (Cyprus) - - FRONT PAGE -

More than half of the govern­ment debt in 2013 was cov­ered by loans, fig­ures re­leased by Euro­stat show.

In all, 59% of Cyprus govern­ment debt was fi­nanced by loans and the re­main­ing 41% was fi­nanced by bonds. In con­trast 81% of the EU aver­age govern­ment debt was fi­nanced by se­cu­ri­ties (bills, bonds, etc. ex­clud­ing shares and fi­nan­cial de­riv­a­tives), 16% by loans and 4% by cur­rency and de­posits.

The fist coun­try with the high­est ra­tio of govern­ment debt fi­nanced by loans was Es­to­nia with 86%, Greece with 75%, Cyprus with 59% and Latvia with 54%. Greece and Cyprus are un­der a fi­nan­cial as­sis­tance pro­gramme from the EU/IMF which cov­ers their fi­nanc­ing needs.

Ex­cluded from in­ter­na­tional cap­i­tal mar­kets since May 2011, Cyprus agreed with the Troika of the Euro­pean Com­mis­sion, the Euro­pean Cen­tral Bank and the In­ter­na­tional Mon­e­tary Fund on a 10 bln fi­nan­cial as­sis­tance pro­gramme, of which 7.5 bln cov­ers its ma­tur­ing debt and fis­cal needs un­til the first quar­ter of 2013.

The re­main­ing 2.5 bln were al­lo­cated for the re­cap­i­tal­i­sa­tion of the bank­ing sec­tor, ex­cept Bank of Cyprus which has been re­cap­i­talised by con­ver­sion of de­posits to cap­i­tal. In con­trast, Malta (92% of to­tal govern­ment debt), the Czech Repub­lic and the United King­dom (both 90%), Bel­gium and Slove­nia (both 87%), Slo­vakia (86%), France and Italy (both 84%) reg­is­tered the high­est pro­por­tions of debt fi­nanced by se­cu­ri­ties.

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