Russia Agrees To Restructure EUR 2.5 Bln Cyprus Loan

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Russia has decided to restructure a EUR 2.5 billion loan it granted to Cyprus in 2011 at the request of the European Commission, Russian President Vladimir Putin said on Monday.

"At the request of the European Commission, we have decided to restructure this debt," Putin told reporters after holding talks with German Chancellor Angela Merkel in Hannover.

"We are making our own contribution," he added, but did not disclose the details of the debt restructuring.

Merkel and Putin met on the sidelines of an industry trade fair in Hannover, where they discussed differences over the Cyprus financial crisis.

European politicians alleged that Russia used the Cypriot banking system to launder their black money. The tax on large deposits in Cypriot banks will mainly affect Russian depositors.

Cyprus had requested Russia to give it more time to repay the debt, which was taken in 2011 and also a reduction on the loan rate from 4.5 percent to 2.5 percent. Russia earlier rejected a bid from Cyprus for further assistance.

Cyprus secured a bailout deal worth EUR 10 billion from the troika - comprising the European Commission, the European Central Bank and the International Monetary Fund. In return, the euro area member agreed to close its second largest bank Laiki, also known as the Cyprus Popular Bank.

Putin said the terms of the Cyprus bailout deal was a unique instance and that such methods of exiting the crisis will not be used any more in the problem areas of the euro region.

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