Cyprus seeks Russian loan on top of EU aid

Cypriot President Dimitris Christofias said Wednesday his government is seeking a loan from Russia on top of the European bailout it requested last week. Christofias said the terms for a new Russian loan would be less onerous than for euro-area rescue funds, which are provided in exchange for requirements to narrow budget deficits. Russia lent Cyprus 2.5 billion euros last December.

“The conditions offered by Russia are more favorable,” Christofias told reporters in Strasbourg, France. “Russia isn’t asking us for anything and they are offering low interest rates.”

Cyprus on June 25 became the fifth euro-area nation to request a financial rescue since Greece triggered the European debt crisis more than two years ago. On June 28, First Deputy Prime Minister Igor Shuvalov said Russia had received requests for financial aid from other countries, without specifying which ones. Christofias said on June 29 the Cypriot request for aid will be mainly for banks. No amount has been specified for the bailout, which will encompass the public sector as well as lenders weakened by their exposure to the Greek economy. Cyprus has also sought assistance from the International Monetary Fund.

With regard to the possible Russian loan, the Cypriot government is awaiting a reply, said Nikos Christodoulides, a spokesman for the Cypriot government. He said any Russian aid wouldn’t cancel the need for euro-area funds. “This wouldn’t replace the European bailout,” Christodoulides said in an interview in Strasbourg. “It would be in addition to it.”

Cyprus took over the 27-nation European Union’s rotating six-month presidency on July 1. Cypriot officials were in Strasbourg, home of the European Parliament, to present their EU presidency program to the assembly. [Bloomberg] - 

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