Tags: Cyprus | Russian | Loan | Billion

Cyprus Said to Seek About $6.5 Billion Russian Loan in Moscow

Thursday, 21 Mar 2013 07:37 AM

 

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Cyprus is asking Russia for a loan of about 5 billion euros ($6.5 billion) to help bail out the euro-area nation, said three Russian officials.

The Mediterranean island nation is offering energy and other assets in return, said one of the three officials, who all declined to be identified because the negotiations in Moscow that started are confidential. The assets are offshore natural-gas fields, said a second official. Russia is hesitant and is seeking guarantees, the third official said. Cypriot government spokesman Christos Stylianides didn’t immediately answer calls to his mobile phone.

The euro region’s third-smallest economy is seeking to overcome a deadlock after Cypriot lawmakers rejected an unprecedented 5.8 billion-euro levy on bank deposits imposed by euro-area finance ministers as a condition for a 10 billion-euro rescue. Cyprus is offering Russia “opportunities,” including in banking and natural gas, in return for financial assistance, Finance Minister Michael Sarris said.

“We are asking for help clearly, but something that would make also economic sense for Russia,” Sarris told reporters in Moscow before a second day of talks.

A 5 billion-euro loan would be the same size as the credit Cyprus requested in July from Russia, which also lent 2.5 billion euros to the island nation in December 2011. The Moscow- based newspaper Vedomosti also reported without citing anyone that the country was seeking 5 billion euros.

‘Difficult Issue’

Russia has been offered Cypriot assets, including offshore gas resources “but we didn’t hear anything particularly new,” Russian Prime Minister Dmitry Medvedev said in an interview with European media published on the government’s website. The gas fields are “a difficult issue” as they are difficult to value and because of territorial problems with Turkey, he said.

The proposed Cyprus bailout is “absurd” and “surprising in its unpredictability and lack of consistency,” Medvedev said at a conference in Moscow. He met European Commission President Jose Barroso.

Russia wants to coordinate with the European Union on any Cyprus agreement, rather than trying to strike a separate deal, Vladimir Chizov, the country’s ambassador to the 27-nation bloc, said in an interview in Moscow.

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