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27th Nov 2022

Cyprus could 'combine' Russian and EU loans

  • Christofias at a Cypriot EU presidency map exhibition in Brussels (Photo: consilium.europa.eu)

Cypriot President Demetris Christofias has said he is happy to wait and see whether Brussels or Moscow offers him the best deal for the Mediterranean island's troubled banks - and has not ruled out taking loans from both.

Exploring the reaches of pragmatism, the Russian-speaking, Russian-educated communist leader on Thursday (5 July) said: "We have asked Russia and the European Union. We applied to both at the same time."

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He made his comments to foreign journalists even as representatives from the European Commission, the European Central Bank and the International Monetary were on the island examining Nicosia's books.

The island's banks are heavily exposed to Greece. And it became the fifth eurozone country to apply for a bailout after its credit was given 'junk' status.

Up to €10 billion is expected to be needed. But Cyprus wants its money with as few reform conditions as possible. It received a no-strings attached loan from Moscow last year and it is keen to have another one now.

"Maybe the terms are going to be harsher than the terms of Russia," said the President, building on remarks made in the European Parliament on Thursday that Moscow asks for "low interest rates. Period."

Other bailout countries, most notably Greece where the required changes have led to social unrest - have been expected to strongly cut back state spending and reform their labour markets.

Nicosia is particularly keen to ringfence its 10 percent corporate tax rate - one of the lowest in the EU - which it says is key to attracting foreign investment.

Christofias said there is "nothing wrong" with seeking out what is best for Cyprus.

"Russia is not the Soviet Union of yesterday. Russia is trying to set up a capitalist system," he added amid disquiet in Brussels at the extent of Russian influence on the strategically important island.

The President denied that he would reject an EU loan to take on a Russian loan only.

He also said the country "can combine both," as Cyprus needs money for "development" and for recapitalising its banks.

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