Latest Headlines

Russia and Cyprus close to loan deal

Finance Minister Vassos Shiarly has refused to speculate on Russian media reports that Russia is close to agreeing a loan deal worth 5 billion Euros with Cyprus to prevent it seeking an EU bailout.

RUSSIA is reportedly close to agreeing to a second loan deal with Cyprus worth around 5 billion Euros, according to reports in the Russian media.

Cyprus needs to raise 1.8 billion Euros by the end of the month for the recapitalisation of its ailing Popular Bank (the Island’s second largest) and an additional amount of about 3 billion Euros to refinance the public debt.

Finance Minister Vassos Shiarly remained tight-lipped on the subject yesterday, refusing to speculate on where the money would come from and stating that the government would come to a decision after Sunday’s Greek parliamentary elections.

Russia, with its deep economic ties to the Island, will be looking to prevent Cyprus from turning to the EU for a bailout; a scenario that could see EU imposed reforms to the country’s tax framework result in an exodus of foreign companies from the Island.

Readers' comments

Comments on this article are no longer being accepted.

  • Peter G Davis says:

    They are buying a port in which to moore their fleet. At the moment they use Syria but if there is a change of leadership they will need an alternative place in the Med.

  • Harry Atkins says:

    Just like any loan there will be interest to pay and who is going to pay the loan repayments. Yet again it will be the people who will pay with higher taxes not the politicians or the banks who have got the country in this mess in the first place.

  • Eddie Smyth says:

    “Russia, with its deep economic ties to the Island, will be looking to prevent Cyprus from turning to the EU for a bailout; a scenario that could see EU imposed reforms to the country’s tax framework result in an exodus of foreign companies from the Island”.

    This solution should be encouraged if a better deal is on offer.

    Could the EU impose sanctions like this?. The Fiscal Treaty which one sovereign, democratic country voted for and others have accepted or a new Fiscal Treaty which has been muted from Berlin over the last few days would more than likely bring tax harmonisation with it and could change the tax framework of all EZ countries. Hopefully the People will have a say in any German/EU demand towards federalism if there is a hint of democracy left in Europe.

    The Euro is not fit for purpose and always was a loose cannon, the ECB is firing the stones provided by EU/Germany when it should be the bank of last resort just like every EZ country had before the Euro, now we are all in a straightjacket suffocated by an unelected bureaucracy that is EU. They are not trying to fix the problem in the EZ, they are hell bent on taking total and full control of it and it’s members.

    The 1957 Treaty of Rome established the European Economic Community, the EEC was a brilliant idea and worked well until the economics was removed with the 1993 Maastricht Treaty which created a union, EU. This treaty gave the EU all the powers necessary to prevented this EZ financial crisis from ever happening, but it did not take action on dellinquant members like Greece, whose problems the EU were aware of since the early 00’s, WHY? most of the inner six founding EEC members were breaking the rules as well right up to 2008. The inner six, Germany, France, Italy, Belgium, Netherlands, and Luxembourg account for approximately 235 million of the approx 350 million inhabitant’s of the 17 EZ countries. Germany France and Italy account for 220 million.

    The economic spirit has gone out the window, the community spirit has gone out the window and any sign of the sovereign democratic process is vanishing quickly.

    A conspiracy theorist would see this as an orchestrated effort by a self interested country for supremacy over Europe.

  • Nick - Larnaca, Cyprus says:

    It’s ironic that on the eve of assuming the rotating Presidency of the EU Council of Ministers, Cyprus is taking the begging bowl to Russia. No doubt the authorities are hoping for a favourable deal – but surely there will be strings, if not expectations, attached to such a substantial ‘facility’.

    What happens when the pressure on banks gets worse loans? Have the Russians looked in depth at the integrity of the banking system here? I suspect not, if they do come up with the readies!

  • Mike says:

    I am not convinced any bailout from the EU would require an increase in taxes levied on foreign companies. It would almost certainly require the ending of COLA, 13th pay packets, a reduction in public servants, an increase in public service productivity, an overhaul of income tax collections, compliance and adoption of all EU legislation, regulation and approved codes of practice together with a scrutiny of accounts past and present. That scrutiny may highlight some extremely embarrassing entries and indicate a level of non compliance so as to initiate extreme measures.

    Cyprus for those reasons will avoid an EU bailout like the plague. Russia will want to add to its already vast hydrocarbon empire in the form of Cyprus’ gas and future oil reserves and this is the ideal way and time to do it as Cyprus is on the brink but will just not admit it and will want to save face. Once again it is offering (prostituting) itself for occupation by a foreign power in its vain hope it will bail it out and in return also protect it from Turkey’s aspirations.

    As soon as Russia has had what it needs it will despatch Cyprus to the dustbin, Turkey will still be waiting like a wolf, and the cycle will begin again. When will we learn.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

  • Text size

Back to top