Cyprus Needs Almost $400 Mln. to Avert Default - Ministry

Cyprus Needs Almost $400 Mln. to Avert Default - Ministry
# 17 December 2012 22:56 (UTC +04:00)

Baku-APA. Cyprus needs from 200 to 300 million euros ($250-400 million) in short-term loans to avert a default, Finance Ministry Permanent Secretary Christos Patsalides said on Monday, APA reports quoting Ria Novosti.

“We’ve discussed a loan of 7.8 billion euros [$10.3 billion] to support banks with the troika [of international lenders]. In addition, approximately 200-300 billion euros are needed to finance the present needs of the state. We agreed that these funds will be provided by semi-state companies,” Patsalides said on the state TV.

The Cyprus Telecommunications Authority (CyTA) agreed to provide the state with a three-month loan of 100 million euros (over $131 million) at an interest rate of 5.5 percent, the Cyprus Mail reported.

The Ports Authority has already pledged 38 million euros ($50 million) to the state, with the offer of a further 12 million euros (almost $16 million) if needed.

Patsalides said the country’s authorities “have no plan B” and the country faces a technical default if the semi-government organizations (SGOs) refuse to allocate the money.

Cyprus has requested bailout loans from the trio of international lenders comprising the European Union, the European Central Bank and the International Monetary Fund. The loans are required to repay Cyprus’s 6.1 billion euro ($7.5 billion) external debt and also recapitalize local banks.

However, a bailout agreement is expected no earlier than in late January.

The Cypriot government has said it would seek to get extra loans from Russia. Moscow has already granted Cyprus 2.5 billion euros worth of low-interest loans, but has not yet decided on whether to lend any more cash.

Russian Finance Minister Anton Siluanov said on December 4 that further Russian aid might be unnecessary as the island nation is close to securing bailout loans from the international lenders.