Wednesday October 22, 2014 Search
Weather | Athens
24o C
14o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Russian loan will not ease Cypriot austerity plan

Cyprus will not ease off fiscal austerity measures required by its European Union partners if it secures a 5-billion-euro loan from Russia, its foreign minister said on Tuesday.

The Mediterranean island, with an economy that generates a little over 17 billion euros in annual gross domestic product, may need 10 billion euros to rescue a financial sector hammered by its exposure to Greek debt.

Although it is in talks with international lenders from the European Union, the International Monetary Fund and the European Central Bank - together known as the «troika» - Cyprus has also sought aid from Moscow, a close business and political ally.

Cyprus declined on Tuesday to confirm a newspaper report that Russia has approved the lifeline to the island, which sought a bailout from its EU partners in June.

Cyprus President Dimitris Christofias, who was educated in Moscow and is the EU's only communist head of state or government, has dismissed suggestions that his tight relations with Russia could damage his ties within Europe.

Foreign Minister Erato Kozakou-Marcoullis said a Russian loan deal, if signed, would have no political implications and would not change Cyprus' plans to secure help from the troika.

"It will be a bilateral loan with interest -- no strings attached,» she told Reuters in Cairo where she is due to represent the EU at a meeting of the Arab League on Wednesday. «This is not something that only Cyprus is doing. Other members of the EU have taken bilateral loans."

Russia granted Cyprus a 2.5 billion euro loan in late 2011, after Nicosia's access to international capital markets was cut off because of high yields on its traded debt.

The EU bailout, if agreed, is likely to come with much stricter conditions than the 2011 loan from Moscow.

Kozakou-Marcoullis said the new Russian loan would help stimulate the economy, making for a less painful adjustment to the debt crisis sweeping the eurozone.

"Cuts will be made, because it is important to make a number of long-term adjustments, and of course we will cooperate with the troika,» she said. «But at the same time a loan could help us create more development projects ... to create jobs."

Three rounds of budget cuts totalling around 800 million euros have cut Cyprus's budget deficit from 6.7 percent of gross domestic product to around 4 percent.

The government was still trying to get the deficit down to 3.5 percent this year, said Kozakou-Marcoullis. «From what I understand, a new date for a troika visit will be set after September 17 so this process will continue for some

time to arrive at an agreeable package,» she said.

The cash-strapped island is looking hopefully ahead to 2017 when it aims to start commercial drilling for offshore natural gas deposits that represent a potential export windfall.

Progress in exploiting large natural gas reserves beneath the eastern Mediterranean was held back while Cyprus hammered out agreements with neighbours Lebanon, Israel and Egypt on exploration rights.

Kozakou-Marcoullis said a first phase of exploratory drilling had revealed deposits of 7 trillion to 9 trillion cubic feet in one area alone.

"We have concluded the second round of licensing and we are in the process of examining 33 applications from major companies,» she said. «Hopefully by year-end we will give more licenses."

Regional rival Turkey says Cyprus has no rights over the hydrocarbon deposits and that, by pressing ahead with drilling, it is jeopardizing negotiations on reuniting the island, divided for decades between the Greek south and Turkish north.

Kozakou-Marcoullis disputed the claim, saying the Turkish Cypriot leader had refused to continue the negotiations not because of the energy exploration but in protest at Cyprus assuming the rotating presidency of the EU in July.

"All our partners in the EU support the sovereign rights of the Republic of Cyprus to conduct exploration and exploitation of its natural resources,» she said.

[Reuters]

ekathimerini.com , Wednesday September 5, 2012 (13:43)  
Parliament votes to lift parliamentary immunity of GD MP
Ancient Greek well yields rare wooden statue
Turkey to continue seismic surveys, Davutoglu says
EU’s Juncker wins Commission-team approval with investment vow
PPC gets approval for two wind parks in Rodopi
Greece's dominant power utility PPC won approval from the energy regulator to produce electricity at two wind parks it plans to build in northern Greece, it said on Wednesday. The production...
ECB cools speculation over bank health checks ahead of results
The European Central Bank cautioned on Wednesday against speculation over the outcome of its stress tests after a media report said at least 11 banks had failed the landmark financial health...
Inside Business
BASKETBALL
PAOK fans stop coach Markopoulos´s move to Olympiakos
Olympiakos is once again in the lookout for a new coach after the refusal of PAOK to release Soulis Markopoulos, while Panathinaikos defeated Kolossos on Rhodes on Monday to become the only ...
BASKETBALL
Reds lose to Nea Kifissia, search for new coach
Nea Kifissia recorded the biggest win of its short history in the top flight defeating Olympiakos 68-67 on Sunday, in a Basket League weekend marred by the abandonment of the Thessaloniki de...
Inside Sports
COMMENTARY
Careful what you wish for
Everyone is in a rush to become prime minister in this country, as if they have not learned a single thing from its political history. While still in opposition, PASOK’s George Papandreou ma...
EDITORIAL
Taking care of our key industry
It’s time to face facts: Tourism is the country’s heavy industry. The sector’s considerable contribution has served as a stabilizing factor for the local economy, essentially placing the cou...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Parliament votes to lift parliamentary immunity of GD MP
2. PPC gets approval for two wind parks in Rodopi
3. ECB cools speculation over bank health checks ahead of results
4. Ancient Greek well yields rare wooden statue
5. Turkey to continue seismic surveys, Davutoglu says
6. EU’s Juncker wins Commission-team approval with investment vow
more news
Today
This Week
1. At least 11 banks to fail European stress tests, three in Greece, report says
2. Cyprus to block Turkey's EU talks after EEZ violation
3. Juncker’s EU commission team set for parliamentary green light
4. Taprantzis resigns from privatization agency TAIPED
5. EU’s Juncker wins Commission-team approval with investment vow
6. Fallen tree, smashup cause traffic jams in Athens
Today
This Week
1. Possible third figure in Amphipolis mosaic may be uncovered shortly
2. Istanbul skyscraper casts shadow over Greece's banking ambitions
3. Coalition shooting itself in the foot
4. Greece must stick to reforms, says Schaeuble
5. GPO poll gives SYRIZA clear lead over New Democracy
6. Greece’s closed society is central to its current malaise
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.