The Cypriot government said on Friday the island nation faces the choice of European Union bailout money or a loan from another country to help prop up its Greece-exposed banks, while Cyprus Popular Bank Pcl Chairman Michael Sarris stated that Nicosia needs as much as 6 billion euros in two-year aid to support its banking industry amid losses in Greece and time is running out.

Government spokesman Stefanos Stefanou told The Associated Press that the eurozone country is looking at both options in order to have “flexibility to deal with the issue.”

Popular Bank, the island’s second-largest lender, needs 1.8 billion euros to meet a June 30 recapitalization deadline.

The government has vowed to put up the money if the bank cannot raise it on its own.

Stefanou would not name the country where a possible loan could come from. But an official, speaking on condition of anonymity because of the sensitivity of the matter, identified it as Russia.

Cyprus will decide on its borrowing options once Greek election results are known, Finance Minister Vassos Shiarly (photo) was quoted as saying on Friday.

“It is not necessary that we will seek a loan from the mechanism. There are other options, or a combination of options. But these issues will be decided when we know the outcome of the vote in Greece,” Shiarly was quoted as saying on Cypriot financial website Stockwatch.

Cyprus’s lenders may lose access to European Central Bank funding after Moody’s Investors Service downgraded the country’s ratings this week, Sarris told Bloomberg in a phone interview on Friday.

“I would have done it yesterday, and I would certainly do it before the next time the ECB’s governing council meets,” he said. “I would want to know exactly how the banks are going to be funded. It’s a matter of one week.”

Cyprus, which has to refinance more than 2.2 billion euros in maturing debt next year, has held talks with Russia and China about a loan, according to Sarris, a former finance minister.

Alternatively, the nation could seek a European Union bailout, which may be less preferable because of the conditions that would be attached, he said.

The economy will shrink as much as 1.1 percent this year and is facing “very serious imbalances,” according to a May 30 report by the European Commission.

Cyprus Popular is asking shareholders to buy new stock and boost capital in an offer that is guaranteed by the government.

Last year, the bank posted more than 3.6 billion euros in losses, mainly on Greek government debt writedowns. The bank saw its share price fall from 64 cents on June 17, 2011, to 9.4 cents today.

Shares of the new capital issue are being offered to investors at 10 cents.

“I would be surprised if in the end a significant participation by government were not to become necessary,” Sarris said.

Dubai Group LLC, an investment group owned by the emirate’s ruler, has “expressed interest to participate, but whether they will participate to the full extent remains to be seen,” he said. [Combined reports]