New EU leader Cyprus urges 'fair deal' eurozone debt-sharing

NICOSIA - Agence France-Presse

Cypriot President Demitris Christofias (L) welcomes European Commission President Jose Manuel Barroso (R) at the Presidential Palace in Nicosia on July 6, 2012 after experts from the European Commission, the European Central Bank and the International Monetary Fund arrived in Cyprus on July 3, to look into the eurozone member's request for financial aid. AFP photo

Financially troubled Cyprus, which this week took over the EU helm, complained on Friday of falling "unfair" victim to Europe's debt crisis and urged eurozone nations to share debt according to size.
 
Speaking days after applying for an EU-IMF bailout, Finance Minister Vassos Shiarly complained that his tiny island nation went into the red only after paying "a very heavy price" to enable Greece to write off more than 100 billion euros of debt owed to private banks.
 
The March "haircut" deal -- known as PSI or private sector involvement -- was negotiated in months of talks among private, public and global players to slice around 50 percent off monies owed by Greece to the banks, to lighten its huge burden of debt.
 
Because Cypriot banks held massive amounts of Greek debt, Cyprus lost 4.2 billion euros, amounting to 24 percent of its gross national product, Shiarly said.
 
"This was not a fair way to deal with it," the minister told a news conference.
 
"It was a European problem," he added. "I believe we should have shared that loss fairly on a level playing field." Given that Cyprus accounts for 0.2 percent of the total economies of the 17 nations sharing the euro, the country would have lost only 200 million euros under a fair share-out, amounting to "petty cash," he said.
 
The minister said he would likely raise this issue in talks to negotiate an EU-IMF loan.