BERLIN Jan 13 Cyprus is not a hub for money
laundering and euro zone peers should decide quickly on the
indebted island's bailout bid, its Finance Minister Vassos
Shiarly was quoted as saying on Sunday.
Cyprus applied for financial aid last June after its banks
suffered huge losses on a EU-approved writedown of Greek debt,
but some euro zone states have voiced unease about bailing out a
country they say must improve financial transparency.
"Nobody has proved so far that we offend against the rules
or even support money laundering," Shiarly told Der Spiegel
magazine in an interview. "We see our future as a serious
financial centre. That's why we want to be one step ahead of our
European partners in financial market regulation in future."
Shiarly said money laundering existed everywhere, including
in Germany, but that Cyprus was fighting it resolutely.
In November, Der Spiegel had cited a German intelligence
agency report as saying "Russian oligarchs, business people and
mafiosi" would benefit most from any bailout and that Cyprus was
a "gateway for money laundering in the EU".
But while German Chancellor Angela Merkel on Friday called on
Cyprus to move forward with its own obligations and reforms, she
also said European Union states must show solidarity, apparently
giving conditional support to a bailout for the island.
Finance Minister Wolfgang Schaeuble said later on Friday
that unless the Cypriot government could show it was sticking to
money laundering rules "we have no desire for a race on who is
willing to do something first".
A potential rescue bill of 17 billion euros, equivalent to
the country's entire economic output, has deepened concerns
among EU partners about Cyprus's debts, and some doubt it would
be able to repay the aid without more concessions from lenders.
A number of lawmakers from Germany's parliament, which would
have to approve any bailout, have already voiced concerns about
a rescue for Cyprus, one of the bloc's smallest economies and a
popular tax haven for wealthy Russians.
Cyprus says it fully complies with international rules
against money laundering and that its double-taxation avoidance
treaty with Moscow and low tax rate give it a competitive edge.
Shiarly rejected demands to raise the corporate tax rate,
saying it was discussed intensively when Cyprus joined the EU
and found not to be a problem.
But European Central Bank board member Joerg Asmussen told
Der Spiegel that Cyprus would need to do more before financial
aid could flow.
"My impression is that improved transparency of the
financial sector will be decisive for member states to agree to
a programme," Asmussen was quoted as saying.
The results of an asset review of Cyprus' banking sector are
due on January 18 and euro zone finance ministers will discuss
the country's aid request at a regular meeting in Brussels on
January 21. No decision is expected from that meeting.
Shiarly said the island state's parliament had agreed all
conditions set by international lenders for a bailout.
"Given the uncertain situation, a quick decision by the
Eurogroup is necessary to stabilise market confidence," the
finance minister added.
Ratings agency Moody's slashed Cyprus' credit rating by
three notches to Caa3 late on Wednesday, taking it further into
"junk" territory, and said it saw an even chance of a default.
Debt restructuring has been ruled out as an option by both
Nicosia and Brussels, with European Economic and Monetary
Affairs Commissioner Olli Rehn quoted as saying on Friday that a
'haircut' was not under consideration.
(Reporting by Annika Breidthardt; Editing by Catherine Evans)