BRUSSELS--The European Union hasn't received a request from Cyprus for
help with recapitalizing its bank, but it is ready to act if one were
to be made, a spokesman for the European Commission said Monday.
Earlier Monday, Cyprus's finance minister, Vasos Shiarly, said the
country's need for an international bailout stemming from a looming
bank-recapitalization plan was "exceptionally urgent" and would need
to be resolved within a matter of days.
Cyprus could soon become the fifth euro-zone country to ask for
international support, after Spain made an informal request for an aid
program for its banking sector over the weekend. Cyprus's banks booked
heavy losses from the restructuring of Greek government debt earlier
this year and political uncertainty in Greece following elections on
Sunday could further hurt confidence in some firms.
"We haven't received any indication of a request" from Cyprus, said
Commission spokesman Amadeu Altafaj-Tardio. "We know that the Cypriot
banking sector...is under heavy pressure; we are monitoring that."
Asked whether there was a desire in the euro zone to act on Cyprus
ahead of the Greek elections, Altafaj-Tardio said that "there is no
plan to do so now, but...if something needs to be done we have the
instruments in place and ready to use."
An EU official said that the euro zone has "been on standby for Cyprus
for weeks, so everything is in place. It's almost surprising the cry
for help has not come earlier."
The official said he didn't know when a request for help from Nicosia
would come, but that it would make sense for the government to ask for
help ahead of the Greek vote "if nothing else because we might have
our hands full after."
An official from a large EU member state said that after promising as
much as EUR100 billion to Spain, "adding Cyprus to the list will not
make much of a difference, given how much smaller it is."
However, he warned that the country "still has the potential to
trigger concerns about contagion within the euro zone."
-Write to Gabriele Steinhauser at gabriele.steinhauser@wsj.com and
Vanessa Mock at vanessa.mock@dowjones.com
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June 11, 2012 13:21 ET (17:21 GMT)
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