Cypriots shout slogans during a demonstration outside the parliament building in Nicosia, yesterday.
MOSCOW: Cypriot Finance Minister Michalis Sarris left Moscow empty-handed yesterday after a two-day push to secure the debt-ridden island a financial lifeline failed.
Analysts said the deal fell through because Russia calculated that Cyprus — its very survival in the eurozone remains in jeopardy — was too economically vulnerable to assume the risks.
But Russian Prime Minister Dmitry Medvedev said that Moscow “has not closed the door” on possible future assistance.
“But this will only come after there is a final plan of support for Cyprus from the European countries,” he said after holding talks with European Commission president Jose Manuel Barroso.
Russian officials earlier said two state energy firms had turned down deals put forward by Sarris that could help fill a nearly ¤6bn shortfall left by an ¤10bn bailout offer from the EU and IMF.
“Our investors examined this issue and showed no interest,” Finance Minister Anton Siluanov said.
He added that Moscow never reviewed the possibility of a new loan fearing bankruptcy-threatened Cyprus could not withstand more debt. “We did not examine the question of offering them a loan because the Europeans have set a debt limit that (Cyprus) should not exceed,” Siluanov said.
There was no news however on a request for Russia — holder of between one third and half of all the island’s bank deposits — to ease the terms of an existing ¤2.5bn loan. Sarris had originally said he would stay in Russia until a deal was reached even while the banking crisis raged back home and the government pushed ahead with a ‘Plan B’ that could stave off a default and Cyprus’s possible exclusion from the euro.
An emergency session of the Cyprus parliament that could race through a raft of bills aimed at raising billions of euros was held off Friday as lawmakers re-examined the crucial package’s details.
It was not immediately clear if Moscow’s refusal to cooperate with Nicosia had forced parliament to look at the drafts again.
Cyprus had been expected to introduce an investment “solidarity fund” in which Russia was to have helped underwrite government bonds.
Sarris had told Cypriot television on Thursday that he was not seeking new loans from Moscow but offering it stakes in Cyprus’s banks and energy deposits.
A Russian finance ministry source said Sarris’s energy proposals fell short for both the state oil giant Rosneft and its natural gas counterpart Gazprom.
“They invited us to take part in a tender for fields in which the seismic survey work has not been completed,” the source told the state RIA Novosti news agency.
Some analysts have questioned the reported supply of oil and gas resting off Cyprus’s southern shore. AFP
