Friday, March 22, 2013

Talks Breakdown Between Russia and Cyprus

HuffPo reports:
Cypriot efforts to clinch a contribution from Russia appear to have failed after Russia's finance minister was quoted as saying talks had broken down. Russia is a key player in Cyprus as Russian depositors have parked around 20 billion euros into the country.

Anton Siluanov, Russia's finance minister, said the Cypriots were seeking to get Russian companies to invest in a state-owned firm managing revenues from the island's newfound offshore gas deposits and give Russian companies a stake in that company.

Russian investors were not interested, he said. Cyprus also offered stakes in some of its banks, but Russian banks were not interested in that either. Siluanov also said they were not discussing the possibility of providing a new loan to Cyprus as the EU has set a debt limit for Cyprus.

However, there is still speculation that Russia may get involved in some way if the EU and the IMF sign off on the new Cypriot proposals.

If Cyprus doesn't come up with a plan to raise funds domestically, it may mean the end for Cyprus as a member of the eurozone (This would not be a bad thing.) HuffPo on the state of attitudes within the EZ:
Europe also appeared to turn up the pressure on Cyprus Friday. Luxembourg's finance Minister Luc Frieden told Germany's Inforadio that Cyprus "certainly must change a very great deal in its financial sector ..... I see among some euro states little financial room for more concessions to Cyprus."
The European Central Bank has set Monday as the deadline by which the Cyprus government must come up with a plan or it cuts off emergency funding to the country.

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