Russia says to provide aid to 'resolve' Cyprus debt woes

15th October 2011, Comments 0 comments

Russia will provide financial assistance to Cyprus in an amount sufficient to "resolve" the cash-strapped island's budget woes, the acting Russian finance minister said in Paris on Saturday.

"We have taken the decision to come to Cyprus's aid," the minister, Anton Siluanov, told journalists on the sidelines of a meeting of G20 finance chiefs.

"In the budget that that will be examined in 2011 in the (lower house) Duma, we foresee a global amount of aid sufficient to resolve Cyprus's current problems," he said.

The minister did not elaborate, but Moscow has announced on September 10 it was negotiating a loan asked for by eurozone member Cyprus.

The RIA-Novosti agency referred to unconfirmed reports of a five-year loan of between two billion and 2.5 billion euros, with annual interest of 4.5 percent.

The International Monetary Fund (IMF) warned Wednesday that Cyprus's struggling economy will retract one percent in 2012 from flat growth this year due to a worsening deficit and eurozone instability.

The island's economy has been reeling from the aftershocks of a huge munitions blast in July which knocked out its key power plant -- but the IMF said the main problem was the deterioration of public finances and eurozone turbulence.

International agencies have repeatedly downgraded Cyprus's sovereign credit rating.

© 2011 AFP

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