Spokesman said deal is close

CYPRUS IS very close to striking a €2.5 billion loan deal with Russia, government spokesman Stephanos Stephanou said yesterday. 

Asked whether the loan will be subject to a bilateral agreement, Stephanou echoed the remarks made by Finance Minister Kikis Kazamias on Friday. Kazamias, talking after a cabinet meeting, said that the government is negotiating a loan from Russia with favourable conditions aimed at refinancing Cyprus’ maturing debt and plugging a deficit hole. Kazamias said the funds will also be used to boost the economy’s liquidity.

Cyprus has around €1.0 billion in debt maturing in the first two months of 2012, and its current high yields have fanned speculation that the island could be a candidate for an EU bailout because its borrowing options seem limited.

Stephanou also commented on the second austerity package due to be tabled in parliament next week. Asked whether the government is having second thoughts about proposed cuts on civil servants’ 13th salary, Stephanou said that public discussions of the issue should be limited while political parties and social partners are still negotiating terms.   

“Public discussions often prove counterproductive in such situations, and we want to conclude with the matter as soon as possible to be able to move forward,” Stephanou said.

He was also asked to comment on information leaked yesterday that during its meeting on Friday the cabinet gave Kazamias the green light to move towards implementing a total of €200 million cuts from allowances. Stephanou denied that such a thing took place but repeated the necessity of targeting social allowances as well in the effort to consolidate the country’s finances. 

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.