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Russia Awaits Cyprus Request for Bailout Loan, Storchak Says

Russia’s government is ready to lend Cyprus more money but the government in Nicosia hasn’t officially submitted a request, Russian Deputy Finance Minister Sergei Storchak said.

Finance Minister Vassos Shiarly said June 19 in Nicosia that the Cypriot government is pursuing a loan from Russia to improve its bargaining position in case it has to turn to its euro-area partners for emergency aid. The country may need as much as 6 billion euros ($7.6 billion) to prop up its banks.

“Cyprus hasn’t applied yet, there are no official papers,” Storchak told reporters on an airplane flying back from Los Cabos, Mexico, where he was part of President Vladimir Putin’s delegation at a Group of 20 meeting. Russia loaned Cyprus 2.5 billion euros last year, Storchak said.

Cyprus, which joined the EU in 2004, would be the fifth euro nation to seek a bailout, buffeted by the single-currency bloc’s debt crisis, now in its third year. More than 386 billion euros in loans have been pledged to Greece, Ireland and Portugal. On June 9, Spain requested as much as 100 billion euros to support its banks. Cyprus has been shut out of markets for more than a year.

The Cypriot newspaper Alithia reported on June 12 that Cyprus was asking Russia for 5 billion euros. The Politis daily said three days later that Cypriot President Demetris Christofias was leading the loan talks.

To contact the reporter on this story: Stepan Kravchenko in Moscow at skravchenko@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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