Cyprus Expects Russia Loan on Top of Europe Aid, President Says

Cypriot President Demetris Christofias expressed confidence that his government will win a loan from Russia on top of the European bailout requested last week.

“We do expect a positive reply,” Christofias told reporters today in Nicosia, Cyprus. “We are still waiting for the reply.”

Christofias said the terms for a new Russian loan may be less onerous than for euro-area rescue funds, which are provided in exchange for requirements to narrow budget deficits. Russia lent Cyprus 2.5 billion euros ($3.1 billion) last December.

Cyprus on June 25 became the fifth euro-area nation to request a financial rescue since Greece triggered the European debt crisis more than two years ago. The other four countries are Greece, Ireland, Portugal and Spain.

On June 28, Russian First Deputy Prime Minister Igor Shuvalov said Russia had received requests for financial aid from other countries, without specifying which ones. A day earlier, Deputy Finance Minister Sergei Storchak said no request from Cyprus had been received.

Christofias said on June 29 the Cypriot request for euro aid will be mainly for banks. No amount has been specified for the bailout, which will encompass the public sector as well as lenders weakened by their exposure to the Greek economy.

In his remarks today, Christofias described the Russians as “good friends” and said any Russian aid wouldn’t cancel the need for euro-area funds.

“We could combine both,” he said. “Let’s just hope we manage both.”