The government of Cyprus has called on lawmakers to pass a tough bailout bill. The country needs to raise almost six billion euros to qualify for an international bailout and stave off looming insolvency.
A government spokesman appeared on national television on Friday to urge lawmakers to make the "big decisions" needed to save the Mediterranean nation from bankruptcy.
"The next few hours will determine the future of the country," Christos Stylianides said ahead of a parliamentary debate to discuss a series of measures that have become known as a "Plan B" to rescue Cyprus from imminent bankrputcy.
"We must all assume our share of the responsibility," Styliandes said.
The news conference came just hours after Finance Minister Michael Sarris returned to Nicosia empty handed after two days of talks failed to produce a deal to provide Cyprus with a financial lifeline.
The Kremlin turned down a request to loan Cyprus several billion euros needed to qualify for a European Union-International Monetary Fund bailout and Russian Finance Minister Anton Siluanov said two state-owned energy firms rejected deals pitched by Sarris.
"Our investors examined this issue and showed no interest," Russian news agencies quoted Siluanov as saying. He also said that the Kremlin's hands were tied in terms of providing Cyprus with more state aid.
Moscow had already extended a 2.5-billion euro ($3.2 billion) loan to Cyprus in 2011.
A 10-billion-euro EU-IMF bailout agreed almost a week ago is conditional upon Cyprus coming up with 5.8 billion euros, but an initial plan that would have seen it raise the funds through a levy to people's bank accounts was met with angry protests. That plan also elicited an angry response from Moscow, presumably in part because many wealthy Russians have bank accounts in Cyprus.
Since then, Cyprus has been working on its Plan B, part of which was meant to be the ill-fated loan from Russia. Now that this has fallen through, it is unclear exactly how Nicosia plans to raise the necessary funds.
However, part of the funds contained in the plan to be debated by parliament later on Friday were expected to come from a “solidarity fund” that would be made up of state assets including future gas revenues and a nationalization of pension funds.
This last idea seems to be another that could raise the hackles of ordinary Cypriots. Germany, which as the the eurozone's biggest economy has been a driving force in trying to ensure it's stability, has also expressed its opposition to the idea.
"We cannot accept that people's pensions are mortgaged," Volker Kauder, the parliamentary party leader for German Chancellor Angela Merkel's Christian Democrats (CDU) told public television on Friday.
At the same time, though, it was clear that after almost a week of wrangling by Cyprus' politicians, Germany's patience was wearing thin.
At a meeting of CDU parliamentarians to discuss the issue on Friday, Chancellor Merkel complained that Cyprus was testing the patience of the troika of the EU, IMF and European Central by failing to directly communicate with them for a period of days.
"I still believe in a settlement, but Cyprus is playing with fire," Kauder said.
pfd/jlw (dpa, Reuters, AFP)