Greek Cyprus may seek bilateral loan

NICOSIA - Reuters

Cash-strapped Greek Cyprus has shifted its focus onto a bilateral loan instead of an EU bailout to recapitalize its second largest bank although both options are still open, media reported yesterday.

The eurozone minnow, shut out of capital markets for more than a year, must find the equivalent of 10 percent of its GDP by June 30 to recapitalize Cyprus Popular Bank if no private investor comes forward.
Bilateral lending, which the island’s finance minister has repeatedly described as “not the preferred option” is coming back to the forefront as a likely scenario.

Russia potential lender

Russia, which bailed Greek Cyprus out last year, was back in the frame as a potential lender, newspapers reported.

Efforts were underway to borrow from a third country with “more favorable terms”, Haravghi, the mouthpiece of Greek Cyprus’s ruling AKEL Communist party, reported in a front-page headline. It did not offer more details.

Asked whether the prospect of bilateral lending was distant, Finance Minister Vassos Shiarly told state TV in an interview on June 12 night; “I would say not.”

He also reiterated earlier comments that the island would not “wait until the last day” to take action to prop up the bank, either through bilateral lending or by resorting to the European Financial Support Facility.