December 17, 2012 - 21:27 AMT
PanARMENIAN.Net - Cyprus could default on loan payments due this month unless it can reach an agreement on a bailout with international lenders within days, a government official said on Monday, Dec 17, according to AFP.
"If in the coming days the state is unable to secure 250-300 million euros ($330-$395 million), then the state will proceed to default on payments," finance ministry official Christos Patsalides told a parliamentary committee.
Patsalides said the government had no "plan B" if it fails to reach an agreement on a bailout.
The cash-strapped government wants to dip into the pension and provident funds of semi-government organizations as it has nowhere to turn to secure such amounts on a short-term basis.
Employees of the telecommunications authority have protested against such moves as they fear they will not get their money back.
Patsalides said the government needed a total of 420 million euros to meet its needs but that 170 million euros had been secured from "external sources".
A troika of lenders -- the European Commission, European Central Bank and International Monetary Fund -- is reviewing Cyprus's request for EU financial aid which is expected to go before the eurogroup on January 21.
Cyprus requested a bailout in June when its two largest Greek-exposed banks asked for assistance after failing to meet EU capital buffer criteria.
It then nationalized the island's second biggest lender Cyprus Popular Bank after underwriting its 1.8 billion euro capital issue.
The money needed by Cyprus has been widely reported to total 17.5 billion euros -- 10 billion euros for the banks, 6.0 billion euros for maturing state debt and 1.5 billion euros for public finances.
The country's entire GDP in 2011 was 17.97 billion euros and, according to 2013 budget projections, it is expected to shrink 2.4 percent this year to 17.85 billion euros.