Euro zone leaders welcomed in a statement the political agreement reached with the Cypriot authorities on the cornerstones of the policy conditionality underlying a future macroeconomic adjustment programme. The measures agreed include the introduction of an upfront one-off stability levy applicable to resident and non-resident depositors.

The political agreement reached among leaders of the euro zone supposes the cornerstones of the policy conditionality underlying a future macroeconomic adjustment programme. According to the Eurogroup, the programme will be based on ambitious measures to ensure the stability of the financial sector, determined action to carry out the required fiscal adjustment and structural reforms to support competitiveness as well as sustainable and balanced growth, allowing for the unwinding of macroeconomic imbalances. The request for financial assistance from Cyprus was initially made in June 2012.

The Cypriot authorities' also committed to take further measures mobilising internal resources, in order to limit the size of the financial assistance linked to the adjustment programme. These measures include the introduction of an upfront one-off stability levy applicable to resident and non-resident depositors. Further measures concern the increase of the withholding tax on capital income, a restructuring and recapitalisation of banks, an increase of the statutory corporate income tax rate and a bail-in of junior bondholders. The Eurogroup also announced that it is expecting an agreement between Cyprus and the Russian Federation on a financial contribution.

The Eurogroup also welcomed the Terms of Reference for an independent evaluation of the implementation of the anti-money laundering framework in Cypriot financial institutions, involving Moneyval alongside a private international audit firm, and is reassured that the launch of the audit is imminent. The Eurogroup is confident that these initiatives as well as a strict implementation of the agreed policy conditionality will allow Cyprus' public debt, which is projected to reach 100% of GDP in 2020, to remain on a sustainable path and enhance the economy's growth potential.