Spain and Greece seems to be dominating the Eurogroup meeting, taking place in Cyprus, which holds the EU rotating presidency.

Sources told CNA that the Euro area Finance Ministers would discuss the situation in Spain, Greece, Portugal Ireland and Cyprus.

While Madrid is pressing for direct recapitalization overruling a fully-fledged adaptation programme, the Euro area Ministers are pressing Spain to clarify its intentions.

“What is important currently for Spain is to reduce its fiscal deficit and continue implementing the reforms that have been decided,” Spanish Minister Luis de Guindos told reports on his arrival, noting that he will discuss the conditions for the ECB bond purchase programme.

Additionally, Greek Finance Minister Yiannis Stournaras will present an outline of the new austerity package drafted worth of 11.9 billion EUR drafted by the Greek government in the framework of the ongoing negotiations with its creditors (European Commission, European Central Bank and the IMF). Euro area Finance Ministers appeared supportive over an extension of Greece’s adaptation programme.

“If the deficit turns out somewhat worst than expected because of a temporary downturn in the economy there could be some time but not money. But there could be no time for delaying austerity measures,” Dutch Finance Minister Jian Cornelis de Jager said on arrival.

Irish FinMin Michael Noonan said he “is supportive to the Greek position.”

German Finance Minister Wolfgang Shauble said that the Euro area should wait for the progress report by the Troika auditors before arriving at any decisions.

On Cyprus, Finance Minister Vassos Sharly is expected to brief his counterparts on the discussions with the Troika mission and will give more specific details with regard to the Troika mission’s next visit to the island.

Excluded from the international markets, Cyprus has applied on June for financial assistance from the EU bailout mechanism to recapitalize its banking sector hit severely from Greek sovereign debt haircut and to secure its fiscal requirements.

The informal ECOFIN meeting to he convened under Sharly, will focus on the developments on the banking sector following the European Commission’s proposals for a Single Supervisory Mechanism (SSM) for the banks of the euro area.

The launch of an effective European supervisory mechanism was set as a precondition for the implementation of the 29 June Euro area Summit decision for the possible direct recapitalisation of banks by the European Stability Mechanism (ESM).

“I don’t see a direct recapitalisation of banks through the ESM as early as January 1,” Schaeuble said.

The German FinMin reiterated his satisfaction over the German Constitutional Court’s approval to the European Stability Mechanism, noting, “The euro is sustainable.”