Russian Finance Minister Anton Siluanov said Russia is ready to ‘soften the terms’ of the existing loans and the restructuring of the debt and rates was possible.  He also reiterated Moscow's position that the island would still need additional financial aid from Europe.Siluanov said Russia was looking into the option of an extension, but said: “Our concessions will not solve the problem of Cyprus.”

Hit by its exposure to Greece and shut out of international financial markets for nearly two years, Cyprus asked Russia last month to extend the five-year loan that Moscow provided Nicosia in 2011. Last year Cyprus also asked Russia for a new €5 billion loan. Last week, Cypriot Finance Minister Vassos Shiarly said he expected Russia to extend the maturity of the existing loan to 2022 from 2016.

A draft memorandum of understanding between Cyprus and the EU and IMF says the island could need up to €10 billion to recapitalise its banks, undermined by an EU-sanctioned write-down of Greek government debt in early 2012. A company tasked with assessing the recapitalisation needs of Cypriot banks ahead of the bailout delivered its final report on Saturday. Details were not made public, but reports suggested the total amount PIMCO came up with was around €10 billion, something Cyprus was trying to avoid.

The government and the Central Bank have been trying to convince PIMCO since a preliminary report came out in December. Finance Minister Shiarly said: “Unfortunately the differences between the two sides remain. A new discussion will follow until a common and final position is found.” The minister said PIMCO promotes the worse-case scenario in the case of Cyprus’ bailout, to which he commented: “It is really adverse and very far from baseline scenario.” The baseline scenario provides for €7 billion. On top of the €10 billion the government needs up to €7.5 billion for its own budget. On that basis, Cyprus’ total bailout, including fiscal requirements, could reach €17 billion to €17.5 billion, equivalent to the island's annual economic output.

Cyprus fears that a bailout on that scale could push its debt to unsustainable levels and prompt additional austerity measures, including privatisations of public companies. Some euro member states, notably Germany, have expressed unease at the island's close business ties with Russia, and questioned its commitment to fighting money laundering. However, Cyprus insists it has all the safeguards in place.

Source: Cyprus Mail

Russian Finance Minister Anton Siluanov said Russia is ready to ‘soften the terms’ of the existing loans and the restructuring of the debt and rates was possible.  He also reiterated Moscow's position that the island would still need additional financial aid from Europe.Siluanov said Russia was looking into the option of an extension, but said: “Our concessions will not solve the problem of Cyprus.”

Hit by its exposure to Greece and shut out of international financial markets for nearly two years, Cyprus asked Russia last month to extend the five-year loan that Moscow provided Nicosia in 2011. Last year Cyprus also asked Russia for a new €5 billion loan. Last week, Cypriot Finance Minister Vassos Shiarly said he expected Russia to extend the maturity of the existing loan to 2022 from 2016.

A draft memorandum of understanding between Cyprus and the EU and IMF says the island could need up to €10 billion to recapitalise its banks, undermined by an EU-sanctioned write-down of Greek government debt in early 2012. A company tasked with assessing the recapitalisation needs of Cypriot banks ahead of the bailout delivered its final report on Saturday. Details were not made public, but reports suggested the total amount PIMCO came up with was around €10 billion, something Cyprus was trying to avoid.

The government and the Central Bank have been trying to convince PIMCO since a preliminary report came out in December. Finance Minister Shiarly said: “Unfortunately the differences between the two sides remain. A new discussion will follow until a common and final position is found.” The minister said PIMCO promotes the worse-case scenario in the case of Cyprus’ bailout, to which he commented: “It is really adverse and very far from baseline scenario.” The baseline scenario provides for €7 billion. On top of the €10 billion the government needs up to €7.5 billion for its own budget. On that basis, Cyprus’ total bailout, including fiscal requirements, could reach €17 billion to €17.5 billion, equivalent to the island's annual economic output.

Cyprus fears that a bailout on that scale could push its debt to unsustainable levels and prompt additional austerity measures, including privatisations of public companies. Some euro member states, notably Germany, have expressed unease at the island's close business ties with Russia, and questioned its commitment to fighting money laundering. However, Cyprus insists it has all the safeguards in place.

Source: Cyprus Mail