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World

German Chancellor Merkel tells Cyprus to enact reforms to garner support for bailout

Associated Press
Published | Updated
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    German Chancellor Angela Merkel and Cyprus' main opposition Democratic Rally party leader Nicos Anastasiades, right, are seen before a European People's Party (EEP) meeting in Cyprus' southern coastal resort of Limassol in an extraordinary summit on Friday, Jan. 11, 2013. Among the topics of discussion at the meeting hosted by the leader of Cyprus' main opposition Democratic Rally party Nicos Anastasiades will be the EU budget. Anastasiades is currently leading opinion polls as the top contender ahead of the country's Feb. 17 presidential election. Cyprus is in the midst of talks with international lenders on a bailout to rescue its ailing banking sector that sustained massive losses on bad Greek debt and loans. (AP Photo/Petros Karadjias) (The Associated Press)

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    German Chancellor Angela Merkel gestures as Cyprus' main opposition Democratic Rally party leader Nicos Anastasiades, right, looks on, following a European People's Party (EEP) meeting in Cyprus' southern coastal resort of Limassol in an extraordinary summit on Friday, Jan. 11, 2013. Among the topics of discussion at the meeting hosted by the leader of Cyprus' main opposition Democratic Rally party Nicos Anastasiades was the EU budget. Anastasiades is currently leading opinion polls as the top contender ahead of the country's Feb. 17 presidential election. (AP Photo/Petros Karadjias) (The Associated Press)

  • 017cceeb-Cyprus Financial Crisis
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    German Chancellor Angela Merkel shakes hands with Cyprus' main opposition Democratic Rally party leader Nicos Anastasiades, right, following a European People's Party (EEP) meeting in Cyprus' southern coastal resort of Limassol in an extraordinary summit on Friday, Jan. 11, 2013. Among the topics of discussion at the meeting hosted by the leader of Cyprus' main opposition Democratic Rally party Nicos Anastasiades will be the EU budget. Anastasiades is currently leading opinion polls as the top contender ahead of the country's Feb. 17 presidential election. (AP Photo/Petros Karadjias) (The Associated Press)

LIMASSOL, Cyprus – German Chancellor Angela Merkel says Cyprus must move ahead with economic reforms so it can garner support for a rescue package that it's trying to finalize with international creditors.

As she arrived for a European conservative parties' conference in Cyprus, Merkel said Friday that the country needed to embrace reforms if it hoped to get any bailout.

Cyprus has already enacted public sector pay cuts and tax rises as part of a draft bailout deal it has negotiated with the European Commission, the European Central Bank and the International Monetary Fund. It is resisting calls for privatizations, however.

Cypriot banks took huge losses on bad Greek debt and loans and their rescue needs are still being calculated. The estimate will affect the size and terms of Cyprus' bailout deal.