Cyprus said on Tuesday it would not default on its payments and had secured necessary financing to meet its immediate requirements.
The island is awaiting a credit line of up to 17.5 billion euros from international lenders after its banks suffered huge losses to debt-crippled Greece.
The government had «secured all its current financing needs», the finance ministry said in a statement.
On Monday a senior finance ministry official told parliament the state could leave public workers unpaid this month unless semi-government organisations lent the state money.
Cyprus has been shut out of international capital markets for more than a year and has been heavily reliant on high yield, short term domestic borrowing either from banks or pension funds.
The pension funds of public electricity company EAC, Cyprus telecoms Cyta and the Cyprus Ports Authority have agreed to giving the state cash to meet the December payroll.