Cyprus prez outlines plan to rebuild economy after bailout

Cypriot President Nicos Anastasiades announced a range of tax breaks and subsidies to boost investment and save jobs after the country's banking sector was torn apart by a financial rescue that imposed losses on depositors.

The government will offer tax breaks of as much as 25 per cent for companies hiring new employees for at least one year and create a fund to manage state assets, Anastasiades said on Saturday in comments broadcast live on state-run CyBC TV. The package also includes plans to create casinos and the lifting of some building regulations to draw investment in resorts and golf courses.

"There is no doubt that trials and tribulations await us," Anastasiades said. "For us to succeed in kick-starting the economy and to emerge from this crisis as soon as possible, we must strictly adhere to all the commitments we have undertaken in this loan accord."

Anastasiades agreed on March 25 to a Euro 10-billion ($13 billion) loan from the euro area and the International Monetary Fund in return for measures, including a tax on bank deposits of more than Euro 100,000 at the country's two biggest banks as well as wage and pension cuts and the sale of assets and gold. Those concessions were demanded by creditors in a bid to rapidly shrink what European and IMF officials called an oversized and unsustainable banking sector.