Bailout 'Not Only For Banks' - FM Shiarly

If Cyprus resorts to the European Financial Stability Fund (EFSF) it will not only be for banks but for the future needs of the country, said Finance Minister Vassos Shiarly in comments reported by the state news agency.

According to the minister, when a country enters the EFSF it takes into account all the facts, including the needs that may arise in subsequent periods."

Cyprus is drawing closer to requesting a bailout from the European Financial Stability Fund (EFSF). According to press reports, the request may come as early as this week.

Borrowing from the EFSF is 'not bad or shameful', said Shiarly, referring to Spain as an example, saying that Cyprus should follow in its footsteps and bail out its banks through a loan from the EFSF.

Over the weekend, Spain informed the Eurogroup it intended to apply for a 100 billion-euro loan from the EFSF to recapitalise its banks.

Time is running out for Laiki Bank, which lost 2.5 billion euros on its Greek debt exposure and now needs 1.8 billion to pass European Central Bank stress tests at the end of June.

The state has already stepped in with a bail out plan for Laiki, and now expects to get the funds either from a third country or from the EFSF. By the end of May, there was still no success in getting a bank recapitalisation loan from a third country, said Shiarly.

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