Cyprus has been saved from a EU/IMF bailout by the loan as it has been effectively frozen out of international bond markets mainly due to Cypriote banks exposure to Greek government debt. 

The move is sure to further cement the already close ties between Russia and Cyprus. “The climate was particularly friendly at our meeting with our Russian colleagues, and I believe this agreement will assist Cyprus to face some of the consequences of the European and global financial crisis,” said Cypriote Finance Minister Kikis Kazamias.

The minister also pointed out the high significance of such timely assistance on the part of Russian Federation. “The most important significance for me and the Cyprus economy is the trust and confidence shown by a large, friendly country, which, through this loan, confirms the level of trust shown in the Cyprus economy. This is very important from a psychological perspective in terms of the message this sends,” he said.