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Cyprus and Russia fail to agree on loan
March 20, 2013 / 7:53 AM / in 5 years

Cyprus and Russia fail to agree on loan

MOSCOW (Reuters) - Russia and Cyprus failed to agree on a loan deal at talks on Wednesday which Nicosia hoped would help it though its financial crisis.

Cyprus' Finance Minister Michael Sarris holds a news conference during a euro group finance ministers meeting at the European Union Council in Brussels March 16, 2013. REUTERS/Eric Vidal

Cypriot Finance Minister Michael Sarris said after talks with Russia’s finance minister, Anton Siluanov, that he would stay on in Moscow for as long as is needed to try to secure an agreement.

Cyprus has asked Russia for a five-year extension of a loan of 2.5 billion euros ($3.22 billion) that matures in 2016, as well as a reduction in the 4.5 percent rate of interest.

Cyprus has also asked Russia to loan it a further 5 billion euros, the Russian finance ministry says, but Moscow has not announced a decision on the request.

“We had a very honest discussion, we’ve underscored how difficult the situation is,” Sarris told reporters. “We’ll now continue our discussion to find the solution by which we hope we will be getting some support.”

Before the talks with Siluanov, Sarris said he was hopeful of “a good outcome”.

But after the talks, he said: “There were no offers, nothing concrete ... We’re happy with a good beginning.”

Moscow is angry that the European Union did not consult it over a proposed levy on banking deposits held in Cypriot banks as part of a 10-billion-euro bailout of the Mediterranean island. Late on Tuesday, the Cypriot parliament overwhelmingly rejected the proposed levy.

Reporting by Lidia Kelly, Writing by Katya Golubkova, Editing by Timothy Heritage

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