Cyprus to request €2bn of its own loan to Greece

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He is due to commence talks with Greek Prime Minister Antonis Samaras today, with the two countries financial situations being the main point of discussion. Reports indicate that Anastasiades will be asking for Greece to provide €2bn from its €48bn bank recapitalisation package to support Cypriot lenders.

Little over a fortnight ago, Anastasiades, said that in his role as President he would make Cyprus’s bailout his top priority. This radical move shows how far he is willing to go to fulfil that promise. “We’re doing everything we possibly can to pull Cyprus out of crisis but the road ahead is not strewn with roses,” Anastasiades said in talks with Greek premier Antonis Samaras.

Cypriot banks had previously invested heavily in Greek bonds but lost around €4.5bn when the EU decided to reduce the Greek debt by about 75 percent.

The talk comes as Alexander Dobrindt, the general secretary of the Christian Social Union (CSU), said Europe should continue working on an exit strategy for Greece. Dobrindt, who is a close ally of German chancellor Angela Merkel, told German newspaper Die Welt am Sonntag: “The greatest risk for the euro is still Greece.”

He said: “We have created a situation that gives Greece a chance to return to stability and restore competitiveness. But I still hold that, if Greece is not able or willing to restore stability, then there must be a way outside the eurozone.”

Ahead of Anastasiades’s departure, Archbishop Chrysostomos of Cyprus, suggested that the island would return to the Cypriot pound if it cannot reach agreement with the troika.
“If they want to destroy us [through harsh demands], then we say goodbye to the euro… We can survive with the Cyprus pound,” he said.

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