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Cyprus urges Greece to break impasse, cut a deal with lenders

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Cyprus urged Greece to cut a deal with its international lenders on Tuesday, saying the onus was clearly on Athens to break an impasse on the future of its bailout package.

Talks in Brussels between Greece and the rest of the Eurogroup broke down on Monday when Athens rejected a proposal to request a six-month extension of its international bailout package as “unacceptable”.

“I believe that the Greek government, knowing the facts and the realities, needs to take its decisions; if it wants an extension to the programme, it must request it now,” Cypriot Finance Minister Harris Georgiades told state radio.

“If it doesn’t want to do that, it would, I suppose, already have defined its alternatives which would allow for the financing of the Greek state and its economy,” Georgiades said, without elaborating.

Georgiades said Cypriot backing for Greece was a given. But when asked what it would support, he said: “It’s not clear what the (Greek) request is to support.”

Cyprus was forced to secure its own international bailout in March 2013, when its banks chalked up billions of euros in losses from their exposure to a Greek sovereign debt write-down, designed to make Athens’s debt burden more sustainable.

In return for 10 billion euros in aid Cyprus was forced to shut down a major loss-making bank, arrange a hasty fire-sale of Cypriot bank subsidiaries in Greece and bail-in uninsured deposits exceeding 100,000 euros held at Cypriot lender Bank of Cyprus. (Reuters)

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