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Cyprus finalizing plan to qualify for bailout

By Menelaos Hadjicostis

Associated Press

Published: Friday, March 22 2013 3:50 p.m. MDT

Meanwhile, Cypriot efforts to clinch a contribution from Russia appeared to have failed. Russia is a key player in the crisis as Russian depositors have parked around 20 billion euros ($25.8 billion) in the country.

Michael Sarris returned to Cyprus on Friday night after spending three days in Moscow trying to drum up support.

"We will only be ready to discuss various ways of support for that state only after the EU nations and Cyprus work out a final settlement," Russian Prime Minister Dmitry Medvedev told a news conference.

Russia's finance minister, Anton Siluanov, said the Cypriots were seeking investment from Russian companies in a Cypriot state-owned firm that will manage revenue from the island's newfound offshore gas. The Russian investors, however, were not interested.

Cyprus also offered stakes in some of its banks, but there were no takers in Moscow for that, either. Siluanov also said they were not discussing providing a new loan to Cyprus as the EU has set a debt limit for Cyprus.

Back in Nicosia, worried Laiki employees gathered near parliament for a second day to protest the bank's restructuring, which would break the lender in two. One side would take on the soured investments to allow the stronger side to survive. Depositors who have a portion of their money taken by the government would receive an equity stake in the so-called good bank.

"The bank is finished, we'll lose our jobs and I'm worried about my kids," Laiki employee Nikos Tsiangos said, standing behind barricades and a cordon of police that have blocked the way to Parliament. "They've brought us to the brink, the Europeans wanted to destroy our economy and they've done it."

Europe also turned up the pressure on Cyprus. Luxembourg's finance Minister Luc Frieden told Germany's Inforadio that Cyprus "certainly must change a very great deal in its financial sector ..... I see among some euro states little financial room for more concessions to Cyprus."

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Elena Becatoros in Nicosia, Cyprus, Geir Moulson in Berlin and Nataliya Vasiliyeva in Moscow contributed to this report.

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