Cyprus sought a financial lifeline from the euro area's firewall funds, becoming the fifth of the euro's 17 member states to request a bailout.
The goal is to "contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure to the Greek economy," the Cypriot government said yesterday in a statement distributed by the press and information office in Nicosia.
The request will be limited to support for Cypriot banks, which need less than 6 billion euros ($7.5 billion), in hopes of securing aid with fewer conditions than a full-fledged economic rescue package, according to a person familiar with the bailout talks. The government still believes it has a chance to get a loan from China or Russia, which it might use to improve its bargaining position, the person said, declining to be identified because the talks are confidential.
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