Brussels, 30/01/2013 (Agence Europe) - Cyprus is stepping up efforts to convince its EU partners that it is properly tackling money-laundering and, on Wednesday 30 January, Germany denied reports in Süddeutsche Zeitung that it would now back a Cypriot aid programme. Nothing has changed, explained a spokesperson for the country's finance ministry.
The reluctance of the German government is due in part to fears that taxpayers would have to pay to bail out Cypriot banks, which Germany sees as harbouring dirty money deposited by Russian mafia. Eight months ahead of general elections in Germany, Social Democrats and Greens have already refused to ago along with any aid programme, and their votes are crucial to allow the necessary go-ahead to be granted by the Bundestag. The CDU is not convinced that there would be any danger to the eurozone if Cypriot defaulted on its debts, despite warnings to the contrary by the European Commission, European Central Bank and most recently, the former head of the Eurogroup, Jean-Claude Juncker, who pointed out however that repayment of the aid to Cyprus, which might be as high as 100% of its GDP, would be “an enormous challenge”.
Russian aid. On Wednesday, the Cypriot president, Demetris Christofias, said that Russia is prepared to join the EU in providing aid to Cyprus. Moscow may, therefore, go along with the Cypriot request for five extra years for repayment of a Russian loan of €2.5 billion granted in 2011. (EL/transl.fl)