Cyprus has come close to a deal to get much needed bailout loans from the troika of international lenders, Cyprus’ President Dimitris Christofias said on Thursday.
“After tough negotiations with the troika taking into account the complex conditions faced by our country, we are very close to signing a memorandum with the troika,” the president said, adding few questions remained and existing differences could be resolved.
The mission of the troika of international lenders comprising the European Union, the European Central Bank and the International Monetary Fund left the island nation on Thursday after regular talks that yielded no final accords on bailout funds.
Cyprus Government spokesman Stefanos Stefanu said on Wednesday differences persisted “on some very important issues.”
Cyprus officially applied to the European Union and the IMF for financial aid in late June but the island nation and creditors failed to agree on the amount of loan cash needed or the austerity measures it needs to put in place.
A report compiled by UK-based Barclays Bank in summer said Cyprus might seek foreign loans worth 10.6-18.4 billion euros ($13-22.6 billion) to 2016, equaling up to 100 percent of the island nation’s gross domestic product.
The loans are required to repay Cyprus’s 6.1 billion euro ($7.5 billion) external debt and also recapitalize local banks. The Cypriot banking system was hit hard by the eurozone’s spiraling sovereign debt crisis after local banks had to write down billions of euros in “voluntary” Greek debt restructuring.
The Cypriot government has said it hopes to get extra loans from Russia to avoid tight austerity measures.
Russia has already granted Cyprus 2.5 billion euros worth of low-interest loans, but has not yet decided on whether to lend any more cash.