Tuesday

28th Mar 2017

Cypriot minister in Moscow as Putin enters bailout crisis

  • Russia - holding the key to the Cypriot debt crisis? (Photo: Holy Trinity Church of Pārdaugava)

Cypriot finance minister Michalis Sarris headed for Moscow early on Wednesday (20 March) for talks with his Russian counterpart, finance minister Anton Siluanov, in the latest twist of the island's bailout drama.

Speaking on Cypriot news channel CNA, Sarris said that he would not leave Moscow until a deal had been reached. "The situation needs to be resolved today," he said, confirming that the meeting with Siluanov would "discuss how Russia could assist in finding the billions needed."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The Moscow mission comes as Cyprus seeks an alternative to the controversial €10 billion EU rescue rejected on Tuesday night by the Cypriot parliament.

Following the vote, which did not see a single MP back the bailout, Russian President Vladimir Putin held a phone conference with Cypriot President Nicos Anastasiades.

According to a statement issued by the Kremlin, Putin "expressed concern about possible measures that could harm the interests of Russian legal entities and citizens" on the Mediterranean island.

The statement added that Putin and Anastasiades would "continue consultations on this issue both in a bilateral format and with the European Commission."

Earlier, Putin had described the EU's proposed €5.8 billion one-off levy on Cypriot savers' money as "unfair, unprofessional and dangerous."

The close involvement of Moscow in the Cypriot mess is a new development in the eurozone crisis.

But Cyprus and Russia have had strong links ever since the Mediterranean island declared its independence from Britain in 1960.

Economic and military ties between the two countries advanced since the collapse of the Soviet Union. Some EU officials have in the past referred to Cyprus, which joined the EU in 2004, as Moscow's "Trojan donkey."

Cyprus is officially the third largest foreign investor in Russia, while the island courted controversy and a diplomatic row with Turkey in 1998 after striking a $200 million deal to buy 40 surface-to-air missiles from Moscow.

Credit rating agency Moody's estimates that around €25 billion of Russian money is held in Cypriot bank accounts, with loans worth a further $40 billion (€32 billion) having been pumped in to Russian companies in Cyprus.

Cyprus is also hoping to delay the repayment of a €2.5 billion loan granted by Russia in November 2011.

Meanwhile, early on Wednesday reports on Cypriot TV channel Sigma, and covered elsewhere, indicated that Russian giant Gazprom had submitted an offer to the Cypriot government to take control of part of the country's banking sector in exchange for access and exploration rights to the country's natural gas reserves. Gazprom has yet to make an official comment.

Cyprus rejects bailout deal

The eurozone plunged into uncertainty on Tuesday after the Cypriot parliament rejected its EU bailout plan by an overwhelming majority.

Cyprus struggling on bailout Plan B

With no firm offer from Russia, Cypriot officials are scrambling to find alternative money to secure a €10 billion EU bailout.

Analysis

Lukashenka: End of an era?

The political spring in Belarus ended just as the actual season began, but greater changes loom after 23 years of dictatorship.

Investigation

How the Italian mafia found a Dutch home

One of the biggest mafia trials in Europe in recent years is about to end. Members of the Crupi clan are accused of smuggling vast amounts of cocaine from South America to Italy, using the Netherlands as their main hub.

Stakeholders' Highlights

  1. Belgrade Security ForumCall for Papers: European Union as a Global Crisis Manager - Deadline 30 April
  2. European Gaming & Betting Association60 Years Rome Treaty – 60 Years Building an Internal Market
  3. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  4. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  5. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  6. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  7. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  8. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  9. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  10. Party of European SocialistsWe Must Renew Europe for All Europeans
  11. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  12. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People