NICOSIA, Cyprus, July 6 (Reuters) – Cyprus should generate
foreign income from the export of natural gas by 2019, its
industry minister said on Friday, which is too far in the future
to help the island overcome financial problems caused by its
stricken banking sector.

The island’s commerce, industry and tourism minister said
the vast reserves of natural gas discovered in the waters
between Cyprus and Israel should be developed for domestic use
in 2017 and provide export revenue from 2019 or 2020.

NICOSIA, Cyprus (Reuters) – Cyprus’s president played up his close ties with Russia on Thursday, saying he was hoping to secure more financial support from Moscow as well as from the European Union as he bids to keep the island economy from collapsing.

Demetris Christofias, who was educated in Moscow and is the EU’s only communist head of state or government, dismissed suggestions that his tight relations with Russia could damage his ties within Europe and said it was perfectly normal for a country to look to all its allies for help.

BRUSSELS (Reuters) – They were bleary-eyed in their crumpled suits early on Friday morning, but euro zone negotiators were smiling after a hard-fought night of talks that struck a surprisingly far-reaching deal to prop up the euro.

An agreement to let the euro zone’s rescue funds directly recapitalize banks – something Spain has long held out for – went substantially beyond what almost all diplomats and finance officials expected going into the two-day summit.

BRUSSELS, June 29 (Reuters) – Under pressure to prevent a
catastrophic breakup of their single currency, euro zone leaders
agreed on Friday to let their rescue fund inject aid directly
into stricken banks from next year and intervene on bond markets
to support troubled member states.

They also pledged to create a single banking supervisor for
euro zone banks based around the European Central Bank in a
landmark first step towards a European banking union that could
help shore up struggling member Spain.

BRUSSELS, June 29 (Reuters) – Euro zone leaders agreed on
Friday to take emergency action to bring down Italy’s and
Spain’s spiralling borrowing costs and to create a single
supervisory body for euro zone banks by the end of this year, a
first step towards a European banking union.

Responding to pleas from Spanish and Italian leaders, a
midnight summit of the 17-nation currency area agreed that euro
area rescue funds could be used to stabilise bond markets
without forcing countries that comply with EU budget rules to
adopt extra austerity measures or economic reforms.

BRUSSELS (Reuters) – Italy and Spain, battling searing market pressure in the euro zone’s widening debt crisis, held up agreement on measures to promote growth at a European Union summit on Thursday to demand urgent action to bring down their borrowing costs.

Italian Prime Minister Mario Monti and his Spanish counterpart, Mariano Rajoy, refused to sign off on a 120 billion euro ($149 billion) growth package until EU paymaster Germany approved short-term measures to ease their cost of credit, officials said.

BRUSSELS (Reuters) – Euro zone experts discussed a Finnish proposal for Spain and Italy to issue covered bonds to make their debt more attractive and to allow the euro zone’s permanent bailout fund to bid at primary auctions of the two countries, officials said on Thursday.

The aim of the Eurogroup Working Group of deputy finance ministers and treasury officials is to find a way to lower financing costs for the two sovereigns that European Union leaders meeting in Brussels could discuss later.

BRUSSELS (Reuters) – European finance officials were working on urgent measures to ease financial market pressure on Spain and Italy, which are too big to bail out, as EU leaders began a summit on Thursday deeply divided over how to resolve the euro zone’s debt crisis.

French President Francois Hollande said on arriving at his first full European Union summit after six weeks in office that he expected agreement on emergency steps to help euro zone partners whose borrowing costs had reached unsustainable levels.

BRUSSELS (Reuters) – European Union leaders are likely to discuss the possibility of the euro zone’s bailout funds buying Spanish and Italian bonds as they are issued, to help ease funding costs for Rome and Madrid, EU officials said on Thursday.

The temporary European Financial Stability Facility (EFSF) and its replacement, the European Stability Mechanism (ESM), have a mandate to buy bonds of euro zone countries directly at the primary auction.

BRUSSELS (Reuters) – Europe should prepare to live in a state of crisis for the rest of the decade but a stronger and more resilient continent will eventually emerge, Finland’s Europe minister said on Thursday.

Speaking at the start of a summit of European Union leaders that could help determine the fate of the single currency, Alex Stubb told Reuters: “We should all mentally be prepared to be in this crisis throughout this decade. Europe works in crisis cycles and they usually last a decade.”