Cyprus seeks loan amid bailout concern

Neoklis Sylikiotis, Cyprus’s minister of commerce, industry and tourism, is visiting China to “explore the ground” for receiving a loan from the Asian nation amid speculation it may need a European bailout.

The minister, who is also in charge of energy affairs, is in China with Michael Sarris, chairman of Cyprus Popular Bank Pcl, the east Mediterranean island’s second-largest lender, Sylikiotis said in a telephone interview on Sunday.

“When there is something that can be announced we shall do so,” Sylikiotis said. He declined to give details on the size of any possible Chinese loan.

The Cypriot government is being pressured by the European Union to seek a bailout package worth as much as 10 billion euros ($12.6 billion). The nation is also pursuing a loan from Russia to improve its bargaining position after receiving a 2.5-billion-euro payment last year.

Cyprus decided in May to underwrite the issue of 1.8 billion euros in preference shares of Cyprus Popular, which has until June 30 to meet capital requirements set by the European Banking Authority. The government needs as much as 6 billion euros over two years to support the nation’s banks, Sarris said on June 15.

The need to recapitalize Cypriot banks that have been hit by losses on Greek debt is the reason the island nation is facing a possible bailout, President Demetris Christofias told To Vima in an interview on Sunday. The so-called troika (European Commission, the European Central Bank and International Monetary Fund) has operated like a “colonial force” by forcing austerity measures and neo-liberal policies on bailed-out countries, the newspaper cited Christofias as saying. [Bloomberg] - 

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