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Dublin - Eurozone finance ministers formally approved on Friday the terms of a problematic Cyprus debt rescue that will cost Nicosia far more than first thought, with the government seeking additional help.
With the Cyprus crisis driving fresh concerns over the euro's future, EU finance ministers meeting in Dublin welcomed progress by bailed-out Ireland and Portugal, giving them both another seven years to repay their rescue loans.
Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of 17 finance ministers, said they wanted to ease the pressure on both countries. The move was then approved together with their 10 non-euro counterparts.
Dijsselbloem said ministers formally approved the March 25 rescue accord between Cyprus and its international creditors - the International Monetary Fund, European Commission and European Central Bank.
It had appeared earlier Friday, amid some confusion, that Cyprus wanted more bailout aid after leaked documents indicated a sharp increase in the overall amount needed to €23bn from the €17bn agreed last month.
EU Economic Affairs Commissioner Olli Rehn said however there was no need for confusion because the lower figure was net, and the higher, was gross financing needs - with "additional financial buffers... to allow for unexpected fiscal developments and banking sector needs."
"People have been comparing apples with pears and coming up with oranges," Rehn told a press conference following the agreement.
Rehn said regular EU structural funds, used to boost the economy and planned seven years at a time, could be brought forward and re-directed to help Cyprus.
He also warned that accurately forecasting the depth of the recession in Cyprus was impossible, with the economy possibly shrinking by up to 15% this year alone.
In Nicosia, a spokesman for President Nicos Anastasiades said Cyprus was not looking for more money under the bailout programme but rather discussing the "possibility of increasing European funds for growth and social cohesion."
The first aid payment to Cyprus should be possible in May, the ministers said.
The agreement to extend debt repayments for Ireland and Portugal will be especially welcome in Lisbon where the Constitutional Court last week ruled that several measures in the 2013 budget were unlawful.
As a result, the government is likely to find it even more difficult to reduce the public deficit - the shortfall of revenue to spending - to 5.5% of gross domestic product (GDP), the target for this year set under its 2011 €78bn EU-IMF bailout.
Prime Minister Pedro Passos Coelho announced that cuts scheduled for 2014 would be brought forward to try to plug the €1.3bn gap caused by the court ruling.
Both Ireland and Portugal had been pushing for the extension on the grounds that they had stuck closely to the terms of their bailouts and had made most progress in being able to return to the financial markets to raise funds conventionally.
Irish Finance Minister Michael Noonan said Ireland "will be back in the markets by the end of this year," the ultimate aim of the bailout.
Noonan said he could not say how much money the extension would save but noted that Ireland's borrowing costs have fallen steadily in recent months and "we hope that the trajectory will come down" further.
"Our objective is to get back into the market... and we are well on the way," he said, adding: "It is all part of getting out of the bailout."
All 27 EU finance ministers continue their talks in Dublin on Saturday, with efforts to clamp down on tax fraud topping the agenda.
The EU's biggest states - Germany, France, Britain, Italy, Spain and Poland - are coordinating moves they hope will culminate in a deal at a May EU leaders' summit on automatic bank data sharing across borders.
