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Cyprus Min. flies home empty handed

Friday, March 22 07:16:00

Cypriot Finance Minister Michael Sarris was due to fly home from Moscow today after failing to win support in two days of crisis talks with Russia on prolonging a bailout loan or on a possible new financing package.

Talks with Russian Finance Minister Anton Siluanov broke up overnight without even an agreement to extend an existing 2.5 billion euro ($3.2 billion) loan to the Mediterranean island, said two sources familiar with the talks.

Sarris said on Thursday that the discussions also involved possible Russian investments in Cypriot banks and energy resources.

Interest from the Russian side in those assets, which could be secured against a fresh funding package, was also scant, one of the sources said.

Cyprus needs to find 5.8 billion euros in new money by a Monday deadline if it is to receive a 10-billion-euro EU bailout to avert a collapse of its financial system that could push it out of the euro zone.

Angry Cypriot lawmakers on Tuesday threw out a plan to raise the 5.8 billion through a tax on deposits, calling the EU-backed proposal "bank robbery".

A spokesman for the Cypriot embassy said on Friday that Sarris was due to take the 11:55 (0755 GMT) daily flight from Moscow to Nicosia.

The Russian Finance Ministry did not comment. It had earlier indicated that it would issue a statement after the talks but did not publish one. (C ) Reuters