NICOSIA Gloom lifted over Cyprus’ economy yesterday as Finance Minister Vassos Shiarly won over sceptics in Holland while international lenders said they were seeking a durable bailout.
International lenders were working towards a "durable solution" to help Cyprus deal with its banking problems, the International Monetary Fund said yesterday.
IMF spokesman Gerry Rice said talks with Cyprus on a possible funding programme were likely to advance following February’s elections.
Shiarly told Dutch lawmakers that Nicosia was hopeful Russia would give it more time to pay its debt so it could wrestle down a looming bailout bill.
He expects Russia to extend the maturity of a €2.5 billion loan to 2022 from 2016.
"We have been in touch with them. We have every indication; we hope extensions will be made to enable a sustainable debt.”
Hammered by its exposure to Greece and shut out of financial markets for almost two years, Cyprus's bid for aid has been hampered by fears that it may never pay off its debt.
Shiarly suggested Russian authorities were also mulling a contribution towards the bailout amount of €17.5 billion.
Cyprus and the EU have ruled out any notion of debt restructuring, including a haircut, but bondholders nearer the bottom will take a hit.
"Provisions have been made for a (write down in debt), unfortunately, for junior bondholders. A very unhappy situation but out of necessity we have no choice," Shiarly said.
In Nicosia, about 200 bond holders who claim they were duped by the banks staged angry protests outside the central bank and the Bank of Cyprus.