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ECB's Makuch says Cyprus bailout trustworthy

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(Globalpost/GlobalPost)

BRATISLAVA (Reuters) - The fact that the European Central Bank decided to give Cypriot banks access to emergency funding following the country's bailout agreement means the deal is trustworthy, ECB policymaker Jozef Makuch said.

Cyprus managed to avert a default by agreeing in the early hours of Monday to close its second-largest bank and inflict heavy losses on uninsured depositors in return for a 10-billion-euro bailout from international lenders.

Following the agreement, the ECB Governing Council said it would allow further Emergency Liquidity Assistance (ELA) for Cyprus' banks, having threatened last week to cut them off if Cyprus failed to agree on a bailout by Monday.

"The condition to relaunch ELA for Cyprus was a programme which is trustworthy, and the fact that we decided to launch ELA means that this programme is trustworthy," Makuch, who is also the head of Slovakia's central bank, said in response to reporters' questions on Tuesday.

"When it comes to ELA ... no special conditions were established," he said.

(Reporting by Martin Santa and Jana Mlcochova)

http://www.globalpost.com/dispatch/news/thomson-reuters/130326/ecbs-makuch-says-cyprus-bailout-trustworthy