NICOSIA, Cyprus — The finance minister of Cyprus, Vassos Shiarly, strongly criticized European and international lenders on Friday, accusing them of damaging his nation’s banking sector during the bailout of Greece.
The comments reflect Cypriot frustration with the exposure of the country’s banking sector to a large write-down for investors that eased the burden on Athens.
But the comments also showed Cypriot officials preparing to take a strong negotiating position with European and international lenders ahead of talks on their own country’s bailout.
“We were called upon to pay a very heavy price,” Mr. Shiarly told a news conference, referring to the write-downs.
“If you ask me if this was a fair way to deal with it, I dare say, no, it was not a fair way to deal with it.” Mr. Shiarly said Cypriot creditors took an 80 percent loss, amounting to about $5.2 billion, or nearly a quarter of the country’s gross domestic product.
A fair assessment, based on the G.D.P. of Cyprus, would have been a comparatively tiny amount, about 200 million euros ($249 million), he said.
The losses needed to be taken into account by the so-called troika of lenders — the European Commission, the European Central Bank and the International Monetary Fund — in discussions over aid to Cyprus, Mr. Shiarly said. Envoys from the lenders have been in Cyprus this week assessing the country’s needs for aid.
Mr. Shiarly said he would not give a figure for aid until the assessment was complete and negotiations had begun.
A day earlier, the president of Cyprus, Demetris Christofias, sought to raise pressure on European and international organizations to offer favorable terms for a bailout by emphasizing the readiness of another potential lender, Russia, to provide money.
Russia is “a country which is ready to assist our country unconditionally by granting us this loan,” Mr. Christofias told a news conference on Thursday.
“Thinking of the various mechanisms and facilities of the European Union, maybe the terms are going to be harsher than the terms by the Russian republic,” he said.
The Russians have not yet given Cyprus a reply to their request for the loan, which is needed to recapitalize the Cypriot banking sector, but Mr. Christofias said he was hopeful for a “positive” response. Cyprus also could still use bailout funds from the European Union even if it accepted money from Russia, he said.
“Let’s just hope we manage both,” he said. Cyprus, which is in the euro zone, is particularly wary that European lenders would force it to raise its low corporate tax rate in exchange for aid, and so it has been promoting the prospect of less onerous alternatives like a possible loan from Russia.
Mr. Christofias said some of the criticism of his decision to solicit aid from Russia showed prejudice and bias. “Russia is not the Soviet Union of yesterday,” he said.
nytimes.com
The comments reflect Cypriot frustration with the exposure of the country’s banking sector to a large write-down for investors that eased the burden on Athens.
But the comments also showed Cypriot officials preparing to take a strong negotiating position with European and international lenders ahead of talks on their own country’s bailout.
“We were called upon to pay a very heavy price,” Mr. Shiarly told a news conference, referring to the write-downs.
“If you ask me if this was a fair way to deal with it, I dare say, no, it was not a fair way to deal with it.” Mr. Shiarly said Cypriot creditors took an 80 percent loss, amounting to about $5.2 billion, or nearly a quarter of the country’s gross domestic product.
A fair assessment, based on the G.D.P. of Cyprus, would have been a comparatively tiny amount, about 200 million euros ($249 million), he said.
The losses needed to be taken into account by the so-called troika of lenders — the European Commission, the European Central Bank and the International Monetary Fund — in discussions over aid to Cyprus, Mr. Shiarly said. Envoys from the lenders have been in Cyprus this week assessing the country’s needs for aid.
Mr. Shiarly said he would not give a figure for aid until the assessment was complete and negotiations had begun.
A day earlier, the president of Cyprus, Demetris Christofias, sought to raise pressure on European and international organizations to offer favorable terms for a bailout by emphasizing the readiness of another potential lender, Russia, to provide money.
Russia is “a country which is ready to assist our country unconditionally by granting us this loan,” Mr. Christofias told a news conference on Thursday.
“Thinking of the various mechanisms and facilities of the European Union, maybe the terms are going to be harsher than the terms by the Russian republic,” he said.
The Russians have not yet given Cyprus a reply to their request for the loan, which is needed to recapitalize the Cypriot banking sector, but Mr. Christofias said he was hopeful for a “positive” response. Cyprus also could still use bailout funds from the European Union even if it accepted money from Russia, he said.
“Let’s just hope we manage both,” he said. Cyprus, which is in the euro zone, is particularly wary that European lenders would force it to raise its low corporate tax rate in exchange for aid, and so it has been promoting the prospect of less onerous alternatives like a possible loan from Russia.
Mr. Christofias said some of the criticism of his decision to solicit aid from Russia showed prejudice and bias. “Russia is not the Soviet Union of yesterday,” he said.
nytimes.com
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