International lenders said on Friday good progress has been made on reaching a bailout deal for struggling eurozone member Cyprus but that more work is needed. The joint statement from the European Commission, European Central Bank and International Monetary Fund contradicted claims by the Cypriot state news agency CNA late on Thursday that a deal had been reached. Hours after President Demetris Christofias said a deal was \"very close,\" CNA said it had been clinched. But the lenders, or troika, said only that there had been \"productive discussions with the Cypriot authorities on the policy building blocks of a macroeconomic adjustment programme.\" The two sides had \"made good progress towards agreement on key policies to strengthen public finances, restore the health of the financial system and strengthen competitiveness.\" The statement did not say where progress had been made or what remained to be ironed out. \"Discussions are expected to continue from respective headquarters with a view to making further progress toward a potential programme,\" it said. \"Preliminary results of a bank due-diligence exercise, expected in the next few weeks, will inform discussions ... on financing solutions consistent with debt sustainability.\" European Vice President Olli Rehn welcomed what he called \"decisive progress\" in the talks. \"I consider this as an important step towards full agreement on an assistance programme for Cyprus which can be finalised\" once the due-diligence interim results are are known and after agreement by the Eurogroup. Earlier on Friday, Cypriot government spokesman Stefanos Stefanou briefed union leaders on the situation, prompting a sour response from one of them. \"That there are unpleasant and painful measures and provisions in this memorandum is a given. It is something that we as a government had warned of and declared from the beginning,\" he said. Influential civil servants union leader Glafcos Hadjipetrou, when asked about possible strike action, replied: \"Certainly we are not going to say bravo because our salaries have been slaughtered.\" Mass-selling daily Phileleftheros said the government had agreed to total cuts of 1.1 billion euros ($1.4 billion) from the troika\'s initial position of 1.2 billion euros. It said public sector salary cuts would range from 6.5 percent to 15.5 percent over the next three years, the retirement age would rise from 63 to 65 and index-linked wages would be frozen during the recession. The money needed by Cyprus has been widely reported to total 17.5 billion euros -- 10 billion euros for the banks, 6 billion for maturing state debt and 1.5 billion for public finances. On Thursday, Finance Minister Vassos Shiarly said it was 17 billion euros, assuming that the due-diligence on banks came out at 10 billion. The country\'s entire GDP in 2011 was 17.97 billion euros. According to figures submitted to parliament on Thursday with the proposed 2013 budget, the island\'s GDP is expected to shrink 2.4 percent this year to 17.85 billion euros.