Cyprus is in talks with Russia and China for loans of about 10
billion euros, Athens news agency reported on Friday quoting Cypriot
Government spokesman Christos Christofides.
"We are holding high-level negotiations with Russia and waiting for an answer from China," Christofides said.
Last year, Russia agreed to grant 2.5 billion euros in loans to Cyprus, which amounts to about 10 percent of the republic’s GDP.
Cyprus needs the funds to recapitalize local banks which are under stress due to the eurozone debt crisis. International rating agency Moody’s cut the ratings of Cyprus’s two largest banks, Bank of Cyprus and Hellenic Bank in June, and put the island’s third largest bank, Cyprus Popular Bank, on review with a possible downgrade.
Cypriot banks’ exposure to Greek investments is estimated at 23 billion euros, which exceeds Cyprus’s 2011 GDP of 17.3 billion euros.
The troika of international lenders comprising the European Commission, European Central Bank and the International Monetary Fund is likely to visit Cyprus next week for negotiations on possible loans.
Cyprus is assuming the European Union’s rotating presidency for the first time on Sunday, amid concerns about the country’s ability to cope with its own economic problems and help steer Europe out of its financial crisis.
Cyprus, which joined the European Union in 2004, is taking over the six-month rotating presidency from Denmark.
The eurozone's third smallest economy, Cyprus announced last week that it had applied for an EU bailout, citing heavy exposure to debt-stricken Greece.
The country has become the fifth state of the 17-member eurozone to seek emergency funding from Europe, joining Greece, Ireland, Portugal and Spain.
Some media have speculated that Cyprus may need up to 10 billion euros, over half the size of its 17.3-billion euro economy, to sustain its troubled finances.
Russia already provided Cyprus with 2.5 billion euros in low-interest loan in late 2011.
"We are holding high-level negotiations with Russia and waiting for an answer from China," Christofides said.
Last year, Russia agreed to grant 2.5 billion euros in loans to Cyprus, which amounts to about 10 percent of the republic’s GDP.
Cyprus needs the funds to recapitalize local banks which are under stress due to the eurozone debt crisis. International rating agency Moody’s cut the ratings of Cyprus’s two largest banks, Bank of Cyprus and Hellenic Bank in June, and put the island’s third largest bank, Cyprus Popular Bank, on review with a possible downgrade.
Cypriot banks’ exposure to Greek investments is estimated at 23 billion euros, which exceeds Cyprus’s 2011 GDP of 17.3 billion euros.
The troika of international lenders comprising the European Commission, European Central Bank and the International Monetary Fund is likely to visit Cyprus next week for negotiations on possible loans.
Cyprus is assuming the European Union’s rotating presidency for the first time on Sunday, amid concerns about the country’s ability to cope with its own economic problems and help steer Europe out of its financial crisis.
Cyprus, which joined the European Union in 2004, is taking over the six-month rotating presidency from Denmark.
The eurozone's third smallest economy, Cyprus announced last week that it had applied for an EU bailout, citing heavy exposure to debt-stricken Greece.
The country has become the fifth state of the 17-member eurozone to seek emergency funding from Europe, joining Greece, Ireland, Portugal and Spain.
Some media have speculated that Cyprus may need up to 10 billion euros, over half the size of its 17.3-billion euro economy, to sustain its troubled finances.
Russia already provided Cyprus with 2.5 billion euros in low-interest loan in late 2011.
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