Russia to Weigh Serbian $1 Billion Request, Cypriot ReschedulingScott Rose and Gordana Filipovic
Russia is considering Serbia’s request for a $1 billion credit and will discuss more lenient terms for Cyprus’s repayment of its 2.5 billion-euro ($3.3 billion) loan, Russian Finance Minister Anton Siluanov said.
Russian and Serbian officials plan to continue talks in the coming weeks on the loan request, Siluanov told reporters in Moscow today after a meeting with Serbian Finance Minister Mladjan Dinkic. Russia signed an agreement today to provide $800 million to the Balkan country for its infrastructure projects.
Russia will work with European countries on possible steps to revise Cyprus’s repayment schedule, Siluanov said. The east Mediterranean nation has officially asked Russia to extend its 2.5 billion-euro loan by five years to 2021, the Nicosia-based Finance Ministry said yesterday. The euro area’s third-smallest economy borrowed the funds in December 2011 and has recently sought an additional 5 billion euros from Russia.
Russia, holder of the world’s fourth-largest international reserves, has been approached for bilateral financial aid from at least five countries, Siluanov told reporters last month. The $800 million loan made to Serbia will go toward’s Serbia’s railways and completes a $1 billion package signed in 2009. The terms of the agreement were “extremely favorable,” Dinkic said today.
Russia has no plans to grant a new 5 billion-euro loan to Cyprus, Deputy Finance Minister Sergei Storchak said in an interview in Moscow on Dec. 24. Cyprus, downgraded three steps by Moody’s Investors Service yesterday, is bracing for results of a study next week that may show the island nation needs the world’s biggest bank bailout as a proportion of gross domestic product in at least 16 years.
“We’ll cooperate with European countries on the subject of measures needed to shift Cyprus to a more even schedule for debt repayment,” Siluanov said.
German Chancellor Angela Merkel said this week Cyprus won’t get “special” treatment as it negotiates the bailout it requested in June. Cyprus became the fifth euro-area nation to request a rescue, after Greece’s debt restructuring trashed the financial health of lenders including Bank of Cyprus Plc and Cyprus Popular Bank Pcl.