News Column

Debt-ridden Cyprus Rebuffs Angela Merkel Over Bailout Remark

Jan. 10, 2013

Cyprus on Thursday rebuffed a remark by German Chancellor Angela Merkel that it would not receive preferential treatment in its bid for billions in aid.

"What we are demanding is solidarity for a country that has been the victim of Europe's decision for a restructuring of Greece's debt," government spokesman Stefanos Stefanou told RIK state radio.

Nicosia has asked for around 17.5 billion euros (23 billion dollars) from the European Stability Mechanism bailout fund, with almost half of that amount destined to recapitalize its ailing banks.

On Wednesday, Merkel said eurozone rules would apply in the bailout bid and "there won't be any special treatment for Cyprus."

Politicians in Berlin said they worried about using German taxpayers' money to bail out the island nation, reputed to be a tax haven and money laundering hub for Russian millionaires.

Cyprus, which has a communist president, ruffled feathers in Brussels last year when it asked Russia for economic aid while it held the European Union's rotating presidency.

International lenders are expected to deliver a report on the Cypriot banking sector on January 21, which would form the basis for a bailout decision.

Cypriot authorities had said in the past that they expected the decision to come in January, but Eurogroup President Jean-Claude Juncker on Thursday predicted that "it will take longer."

"I don't think that we'll be in a position to bring the Cypriot problem to a final solution during January," the leader of the panel of eurozone finance ministers said in Brussels.

He also warned against underestimating Cyprus' financial woes.

"The Cypriot problem is at least as huge a problem as the Greek problem was," Juncker said. "Because this is a small country, people outside Cyprus could easily consider that this is a small problem - it is not."

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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