BRUSSELS--Cyprus and the International Monetary Fund reached an
agreement Wednesday for a EUR1 billion lifeline that will
supplement EUR9 billion in aid the island will get from its euro
zone partners.
The Fund said its executive board will be asked to sign off on
the assistance in early May.
In return, Cyprus will have to push cuts and savings worth 4.5%
of annual economic output by 2018, on top of cuts worth 5% of GDP
through to 2015. An extra 2% of GDP in savings will come from an
increase in the country's corporate tax from 10% to 12.5% and a
hike on interest-income tax from 15% to 30%.
The IMF's statement, quoting its managing director Christine
Lagarde, said the Cypriot program was "challenging."
Cyprus, with an economy of about EUR17 billion, represents 0.2%
of the euro zone's economic output.
Write to Matina Stevis at matina.stevis@dowjones.com
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