Harris Bank Deposit Agreement

Nicosia and Moscow to renegotiate the loan to Cyprus.

The Minister of Finance Harris Georgiades is expected to send,
within the next few hours, a letter to the Russian government in order
to begin the renegotiation of a Russian loan Cyprus has been granted,
Acting Government Spokesman Victoras Papadopoulos told CAN today.

Called to comment on a Reuters’ report to that effect,
Papadopoulos said that around mid April, the Russian government
approached the Republic of Cyprus expressing the wish to change the
terms of the loan agreement between the two countries.

As a prerequisite, Russia set the approval of the Memorandum and
the loan agreement between Cyprus and Troika (

See International Monetary Fund (IMF).

, EC). “Now
that the Memorandum and the loan agreement have been approved by the
Cyprus Parliament, we proceed with the renegotiation of the loan
agreement with Russia”, he added.

The Republic of Cyprus seeks an extension of the loan maturity and
a reduction of the interest. In addition, the government will ask for
payment of the loan in installement instead of a one-off payment.

According to sources, the government will ask for a reduction of
the interest rate from 4.5% percent to 2.5%.

Russia lent Cyprus 2.5 billion euro in 2011 for five years, with an
annual interest rate of 4.5%.

On [eth][pounds sterling]arch 25,


same as Euroland

 n → ,

 n →  
 Finance Ministers, known
as the Eurogroup, decided on a e1/410 billion bailout for Cyprus coupled
by a bail-in by uninsured depositors. The decision provided that Cyprus`
second largest lender, the Cyprus Popular Bank, will be wound down,
Bank of Cyprus

` uninsured deposits will take losses up to 60%.

The Cyprus government concluded in early April a 10 bln euros
bailout deal with the Troika (European Commission, ECB, IMF), which
needs to be ratified by six national parliaments and the Eurogroup. The
interest rate for the financial assistance loan is approximately 2.5%
and is repayable over a 12-year period after a grace period of a decade.

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