Cyprus hints at a bailout request before end of month
Tuesday 12 June 2012
Cyprus paved the way for a bailout of its own yesterday with time fast running out for the country to prop up its struggling banking sector.
The country is up against a regulatory deadline to recapitalise Cyprus Popular Bank (CPB), which has been bowed by its exposure to debt-crippled Greece. CPB has been looking for an investor willing to fill a €1.8bn (£1.5bn) capital shortfall within three weeks, or it will call on the government to fill the gap.
The Finance Minister, Vassos Shiarly, said: "The issue is urgent. We only have until 30 June."
Cash-strapped Cyprus, which has been shut out of financial markets for a year and is running deficits, will need to borrow the equivalent of 10 per cent of its gross domestic product just to prop up CPB.
Mr Shiarly refused to speculate on the size of the potential aid package but the country has just over €2bn short-term debt maturing next year.
Cyprus assumes the rotating European Union presidency for six months the day after the looming bailout.
Mr Shiarly said: "When one applies to the support mechanism you take into account all the facts, including needs which may arise in coming periods. So it would be a comprehensive request."
The nation could apply for a rescue next weekend, when the focus will be on the Greek election, or on 23-24 June, but they have so far been spooked by the experience of Greece and worried that pressure could be applied to change its tax regime, one of the lowest in the EU.
The nation is negotiating separately with a third country – thought to be China – in the hope that it could secure better bailout terms from its EU partners. Cyprus received a €2.5bn bilateral loan from Russia late last year, sidestepping the EU.
- 1 Massive stage collapse before Radiohead concert kills one
- 2 News in pictures
- 3 Leveson threatened to quit after public attack by Gove
- 4 In pictures: The bewildering face of China
- 5 Osborne: The people’s damning verdict
- 6 Ed Miliband: 'Cameron is the last gasp of the old guard'
- 7 Savers start a 'jog' on Europe's banks as Greece votes
- 8 For whom the bell tolls: £20m 'Memo' project takes shape on Dorset's Jurassic coast
- 9 Still standing: George Galloway reveals why his staunchly Leftist outlook is still invariably right
- 10 Aung San Suu Kyi: A lesson in the value of kindness
- 1 Massive stage collapse before Radiohead concert kills one
- 2 Patrick Cockburn: Greece's day of reckoning dawns in a climate of anger and uncertainty
- 3 The Blagger's Guide To: The best (and worst) fathers
- 4 We just click: How Lego keeps building on its success
- 5 Revealed: Harry Potter is the Antichrist!
- 6 The Leveson Inquiry: We're in this together!
- 7 Osborne: The people’s damning verdict
- 8 David Flatman: Over and out
- 9 Frank Zimmerman and me: The truth about the troll who tormented Louise Mensch
- 10 Aung San Suu Kyi: A lesson in the value of kindness

Experience the Heineken Hub
Get free wi-fi and exclusive i content while you enjoy a tasty pint of Heineken at participating pubs.

Win a sumptuous three-night stay in Austria
Get away from it all in the fresh mountain air at the four-star Hotel Edelweiss & Gurgl.

Win a five-star foodie weekend to Liège
Spend two nights in gourmet heaven at a top hotel in the capital of French-speaking Belgium.

A home to be proud of with Halifax
Download the Halifax's brilliant, free new Home Finder app, and take all the pain out of finding your dream home

Playing a game-changing role during the Games
Cisco is providing the solutions for London 2012's complex IT needs.

Enter the latest Independent competitions
Win anything from gadgets to five-star holidays on our competitions and offers page.

Business videos from commercial thought leaders
Watch the best in the business world give their insights into the world of business.
Career Services
Day In a Page

Still standing: George Galloway

Daniel Radcliffe as drug-taking Beatnik poet

Objets czar: David Usborne’s collection of myriad objects

World's richest woman: Gina Rinehart

Comments