Cyprus may be lucky recipient of Libyan regime’s last debt payment

CYPRUS HAS received nearly €4m from Libya to pay off some of its old debts in what may be the last payment made by the old political guard in the beleaguered North African state, it emerged yesterday.

Commerce Minister Antonis Paschalides yesterday confirmed a report by state broadcaster CyBC that Cyprus recently received from Libya just under €4m for debts owed to the state and businesses.

“These debts have accumulated over the last 20 to 25 years. There was a difference of opinion over how much is owed to Cypriot businesses so for the last year and a half we have been trying to reach some agreement with them,” said Paschalides.

According to the minister, the Libyan justice minister visited Cyprus to discuss the issue some months back, resulting in an agreement to pay back around €7.5m in debts by March 15, 2011. A separate agreement was made with one large Cypriot construction company.

“Then a few weeks ago, we received about half of that, just under €4m, of which €500,000 goes to the state for debts owed, and the rest to the businesses, mostly small and medium-sized businesses. It’s a good bonus for them, I don’t think they expected it,” said Paschalides.

Given the ongoing uprising against long-standing Libyan leader Muammar Gaddafi, the chances of getting the other half at this point appear slim.

“We are probably the last country to get paid by Libya,” added the minister.

The debt to the state was owed for export guarantees provided by Cyprus while the business debts relate to trade with Libya, involving a range of products including shoes and clothing.

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