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The main point of contention between Cypriot and troika officials is how much Cypriot banks need to recover from euro4.5 billion in losses they took on Greek government debt and bad loans. Parliamentary Speaker Yianniakis Omirou said that the troika estimates the needs of the Cypriot banking sector
-- which holds assets eight times the size of the country's economy -- to hover at around euro12 billion ($15.57 billion), twice as much as Cypriot officials believe. That's on top of the approximately euro4.5 billion the country needs to service its debt and pay its bills until 2016. Cyprus has been unable to borrow from international markets for more than a year. A Cypriot request for a euro5 billion ($6.39 billion) loan from Russia
-- twice the amount Moscow gave Cyprus as a rescue loan last year -- has so far gone unanswered. The exact sum Cypriot banks will need won't be known before early next year when investment firm PIMCO and auditors Deloitte finish combing through the lenders' books. Shiarly said not having an exact figure won't keep the government from getting a bailout deal swiftly. Although Shiarly said the government has enough cash on hand to pay public sector salaries for the next couple of months, state coffers are drying up fast. Moreover, prolonging the uncertainty over a bailout deal will tighten the noose around ailing domestic businesses and further drain confidence in the economy. That would be bad news for a country where unemployment has ballooned to 13 percent and the economy is projected to contract by some
2 percent this year.
[Associated
Press;
Copyright 2012 The Associated
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