Nicosia would prefer EU bailout mechanism

Cypriot Finance Minister Vassos Shiarly told CNBC on Friday that resorting to the European Union?s bailout financial support mechanism would be preferable to bilateral loans, but confirmed that Nicosia has also approached Moscow for funding. Shiarly said: ?At the moment we are weighing all our options. It is not a matter of preference but of options. The more we have, the better.?

He also expressed relief at the outcome of the Eurogroup meeting on Thursday, probably meaning that the conditions of the bailout agreement, should Cyprus resort to one, will be relatively easy to bear.

Although there are signs that Cyprus will resort to the mechanism shortly, possibly as early as this weekend, the island?s government keeps changing its tune, as until recently it had been adamant that it would prefer to secure a Russian loan of 4 to 5 billion euros over resorting to the EU mechanism.

Nicosia must find 1.8 billion euros by the end of the month to finance the share capital increase of Cyprus Popular Bank, the island?s second-biggest lender, which was hit hard by the Greek debt restructuring earlier this year.

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