Cyprus Gets Cold Shoulder From Russia On Bailout Aid | WAMU 88.5 - American University Radio

NPR : News

Filed Under:

Cyprus Gets Cold Shoulder From Russia On Bailout Aid

As a deadline on Cyprus to come up with a financial bailout plan nears, a possible rescue from Russia looks to have fallen apart, leaving the island nation few options for staving off default.

Russian Finance Minister Anton Siluanov said as far as Moscow was concerned "the talks have ended," but Prime Minister Dmitry Medvedev left the door open, saying aid from Moscow would be contingent on Cyprus gaining European Union backing for its other money-raising ideas.

Cyprus had hoped to woo the Russians by promising stakes in natural gas reserves recently discovered off the island's cost. Although the prospects of a deal looked shaky, Medvedev said Russia "hasn't closed the door, hasn't said 'no' to Cyprus."

Cyprus has been a favorite tax haven of Russia's oligarchs, who have an estimated $30 billion or more in the country's banks. Cypriot officials had hoped for an extension on the terms of a $3 billion Russian loan and for an additional line of credit from Moscow.

NPR's Joanna Kakissis reports that Cypriot lawmakers were set to vote Friday on a new bailout plan to keep the country solvent and in the eurozone. She says the plan includes radically restructuring the country's biggest banks and creating an investment fund to issue bonds.

Earlier this week, Cyprus rejected a bailout plan from international lenders that would have required the Mediterranean country to levy a one-time tax on the nation's domestic and foreign depositors to raise $7.5 billion toward a $13 billion bailout. On Thursday, the European Central Bank gave Cyprus four days to come up with a "Plan B" or face a cutoff in credit to its banking sector.

The prospect of heavily-indebted Cyprus defaulting on its EU bond payments and being forced out of the eurozone sent ripples through the financial markets. But The New York Times points out that:

"The broader financial system in Europe, the losses resulting from a Cypriot banking collapse and the country's return to its former currency would be minimal compared with the havoc that Greece would have created had it not been bailed out. ...

"Greece may well have been too big to fail last year, but Cyprus, which creates less than one-half percent of the eurozone's gross domestic product, is certainly not."

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

NPR

HBO And 'Game Of Thrones' Haul In The Most Emmy Nominations

HBO got 99 nominations for the 2014 Emmy Awards, the most of any network. HBO's Game of Thrones got 19 nominations, one ahead of FX's miniseries Fargo.
NPR

From McDonald's To Organic Valley, You're Probably Eating Wood Pulp

Many processed foods contain cellulose, which is plant fiber that is commonly extracted from wood. It's used to add texture, prevent caking and boost fiber. And it's been around for ages.
NPR

In Central America, Attempts To Cross U.S. Border Like 'Feeding Frenzy'

Thousands of Central American children are crossing the border and ending up in detention facilities. Host Michel Martin learns more about why so many children are fleeing Central America.
NPR

Twitter Turns World Cup Into A 'Global Sports Bar'

The Brazil vs. Germany World Cup semifinal created more activity on Twitter than any other sporting event had. Host Michel Martin learns about how social media has changed the tournament experience.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.