Russia will provide Cyprus with credit

08.11.2011 The Russian Federation will financially assist Cyprus in the form of a credit that was formalized in agreement between the two states. The terms of such funds provision are the following: three tranches transfer, the first of which will be in January 2012; the total credit amount is 2.5 bln euro, the credit period is 4.5 years; the interest rate under which the funds are given is 4.5% per annum.
The officials of the Republic of Cyprus emphasize the importance of international cooperation with Russia. Let’s note that European countries were ready to credit Cyprus at an interest rate no lower than 15%. The financial assistance provided by Russia will help Cyprus to recover the medium-term financial obligations and on the whole stabilize its economy.

Expert’s opinion

“Inspite of all the economic drawbacks that were caused by the crisis Cyprus is still a popular jurisdiction for the Russian capital investments. That’s why probably Russia decided to credit Cyprus at more profitable conditions than European Union member-states. Thus the balance of interests of both Cyprus and Russia was reached – for the first one this will be necessary investments in economic sector for overcoming crisis consequences, for the second one this will be an additional guarantee for the Russian business that continues investing in such a region”.

On the basis: www.itar-tass.com

Vorontsova Maria ( the lawyer of international consulting department of Honest&Bright)