Please ensure Javascript is enabled for purposes of website accessibility

Cyprus to Open Casinos to Boost Economy

By Associated Press - Apr 19, 2013 at 3:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Country aims to subsidize salaries.

NICOSIA, Cyprus (AP) -- Cyprus' president said Friday that the bailed-out country will open casinos and bolster its tourism sector to get the economy going again.

Nicos Anastasiades unveiled a first batch of measures he said are designed to boost growth in an economy that is projected to shrink by 13 percent until 2015.

Anastasiades included casino openings among campaign pledges before his election in February.

He said Cyprus would fork out 21 million euros ($27.54 million) to partly subsidize salaries for 6,000 jobless people that will be hired in the tourism sector, give businesses tax breaks for hiring new workers and set up solar energy parks.

Young people will be granted state and church-owned land for cultivation. And those having homes or businesses seized because they're unable to pay off loans would be able to stay on as renters, he said.

Cyprus agreed last month on a 23 billion euro ($30 billion) rescue package with its euro area partners and the International Monetary Fund.

The tiny country of less than 1 million people will shoulder 13 billion euros ($17.05 billion) of overall cost of the bailout mainly by imposing heavy losses on bank deposits of more than 100,000 euros ($130,000). The country's second-largest lender, Laiki, will be broken up into a "good" bank which will be folded into the larger Bank of Cyprus and a "bad" bank which will be wound down.

The two banks had lost billions on their holdings of Greek government bonds after that country's debt restructuring.

According to audit firm PIMCO, Bank of Cyprus will need 3.96 billion euros and Laiki 3.835 billion euros to restore their capital buffers by June 2015 under the firm's adverse scenario.

Cyprus' third-largest bank, Hellenic, will need 333 million euros; cooperative banks will need 589 million euros.

The figures are included in a document that a banking official provided to The Associated Press on condition of anonymity because the recapitalization needs of each individual bank haven't been made public.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.