Euro zone approves problematic Cyprus bailout

Euro zone finance ministers formally approved Friday the terms of a problematic Cyprus debt rescue that will cost Nicosia far more than first thought. Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of finance ministers from the euro nations, said ministers had formally approved a March 25 rescue accord between Cyprus and its international creditors - the International Monetary Fund, European Commission and European Central Bank. It had appeared earlier Friday that Cyprus wanted additional aid after leaked documents indicated a sharp increase in the overall amount needed to €23 billion ($30 billion) from the €17 billion agreed last month. But the European Union’s Economic Affairs Commissioner Olli Rehn said the lower figure was net and the higher, gross financing needs - with “additional financial buffers ... to allow for unexpected fiscal developments and banking sector needs.” Rehn said that regular EU structural funds, used to boost the economy and planned seven years at a time, could be brought forward and re-directed to help Cyprus. The first aid payment to Cyprus should be possible in May, the ministers said. In Nicosia, the Cypriot government spokesman said savers will not be hit by a “de facto new recapitalization,” or “haircut” on deposits.