Last updated: February 20. 2013 3:08AM - 112 Views

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(AP) Cyprus says it has no reason to consider privatizing state-owned companies now because it's not yet certain that its public debt burden would be too heavy to bear once it receives rescue money from international creditors.

Cyprus is negotiating a bailout of as much as 17 billion ($22.65 billion) roughly equivalent to its annual economic output with the so-called 'troika' of the European Commission, the European Central Bank and the International Monetary Fund.


Government spokesman Stefanos Stefanou on Tuesday defended the left-wing government's opposition to privatizations in a speech to managers and employees of the state-owned Cyprus Telecommunications Authority.

He said Cypriot negotiators had rejected an initial demand by the troika that Cyprus commit to privatizations. Instead, the two sides agreed to include in a draft bailout agreement that selling state-owned companies would be considered only if the country's debt load is deemed unsustainable.

We believe and we can strongly argue that even if the debt is not sustainable, there are other ways that it can be made so, said Stefanou. One such way, he said, is for Cypriot banks to receive money directly from the EU's bailout fund instead of through the government. That means the banks, not the government, would be responsible for repaying their rescue loans.





That means finalizing a bailout agreement will fall on the shoulders of a new government. Nicos Anastasiades, the head of the center-right Democratic Rally party who leads opinion polls ahead of the Feb. 17 election says he would seek to avoid outright privatizations of major state-owned companies that are nationally and socially beneficial by overhauling them, selling off a stake or seeking a strategic investor.


Why is Cyprus then in the crosshairs? It's clear that there are expediencies and interests arrayed against Cyprus, he said.

Associated Press
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