NICOSIA (Reuters) - Cyprus branded itself on Thursday a victim of Greek debt restructuring and said it anticipated solidarity from its EU partners as it struggles to clinch an international bailout.
Last June, the island became the fourth euro zone state to apply for a financial rescue from the European Union and the International Monetary Fund after its banks suffered huge losses on the EU-approved writedown on Greece's debt.
Aid talks for Cyprus have been complicated by concerns over debt sustainability because of the size of the potential bailout bill. It could reach 17 billion euros, virtually equivalent to the island's national output.
German Chancellor Angela Merkel said on Wednesday she expected the bailout talks to take time, and said there could be no "special conditions" for Cyprus.
She was due in Cyprus on Friday for a meeting of the European People's Party (EPP) - a grouping of centre-right European parties - but was not due to have contacts with the Cypriot government.
"We never asked for special treatment," said Stefanos Stefanou, the Cypriot government's spokesman.
"What we are asking for is an expression of solidarity - which is a basic EU principle - towards a country which is the victim of a European decision to restructure Greek debt."
The island's outgoing government, facing a national election on February 17, is resisting lenders' demands to privatize state assets. It is trying to mitigate assessments of the needs of the banking sector to make the eventual debt load manageable.
In October 2011, EU leaders agreed to impose a valuation discount - or haircut - on Greek sovereign debt holdings.
That decision, which was supported by Cyprus's president, saw the island's banks book losses equivalent to about 20 percent of its entire economic output.
The island, shut out of financial markets for the past 18 months, has been forced to rely on short-term high-yield loans from domestic institutions to meet monthly payments.
Recently it borrowed from the state-controlled electricity authority and its telecoms company. Under a draft accord with lenders, these assets could potentially be privatized to ensure Cyprus will be able to pay back any financial aid.
Cyprus, which is embroiled in a bitter political conflict with neighboring Turkey after a brief war in 1974 split the island into two, says these are strategic assets necessary for national security.
(Reporting By Michele Kambas; Editing by John Stonestreet)