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Russia Rejects Cyprus Financial Rescue Bid as Deadline Looms

Russia Rejects Cyprus Financial Rescue Bid as Deadline Looms

Russia spurned Cyprus’s offers of assets for a bailout as the island nation’s lawmakers begin debate on legislation to avert a financial collapse.

“I think we aren’t able to get the support that we wanted to get,” Cypriot Finance Minister Michael Sarris said in an interview after checking out of the Lotte Hotel in Moscow. “But we must go back home because things are getting serious.”

Cypriot lawmakers begin debating legislation today to prevent a financial meltdown as the European Central Bank threatens to cut off a lifeline for the country’s banks in three days unless a bailout agreement with the European Union is reached. Russian companies and individuals may have about $31 billion of deposits in Cyprus, which in turn is the biggest source of foreign direct investment in Russia.

“The only thing that Cyprus could hope for is Gazprom buying some reserves from them,” Vladimir Kolychev, head of research at Societe Generale SA’s Rosbank (ROSB) unit in Moscow, said by phone. “It’s not clear what these gas reserves are worth, and apparently Gazprom wasn’t particularly interested.”

Source: Bloomberg

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