There was good news all round for Cyprus yesterday with the EU saying Nicosia was a shoo-in for the next disbursement of bailout cash while Russia eased the pain by approving better loan terms.
When Eurogroup Finance Ministers meet in Lithuania today they are expected to give the green light for the island’s next instalment of €1.5 billion which will go to restructuring the co-op banks.
Moreover, Brussels said Cyprus is on track with its adjustment programme and deserves to receive the second disbursement since agreeing a harsh bailout/bail-in in March.
But the post-haircut landscape is looking slightly less bleak with Moscow agreeing to ease the terms of a €2.5 billion loan it obtained from Russia in 2011.
The agreement signed in Moscow lowers the interest rate and extends the repayment period.
Rescheduling of the loan, which Cyprus had lobbied for intensively, translates into benefits of €160 million up to 2016.
The deal was signed by Finance Minister Haris Georgiades and Russia’s Deputy Finance Minister Sergei Storchak.
And the move came as President Anastasiades told Russia’s state news agency that Moscow was a staunch ally as Russians on the island had not “betrayed” Cyprus but decided to stay despite the crisis.