THE FINANCE ministry said yesterday it has secured the necessary cash to cover its current financing needs and there was no possibility of a default, a day after a high-ranking official warned that without loans from semi-government companies (SGOs), the state would run out of money in a matter of days.
Speaking before the House Finance Committee on Monday, finance ministry permanent secretary Christos Patsalides warned that Cyprus could be considered as being in selective default if SGOs refused to provide the necessary cash to cover its immediate needs.
The cash would come from pension funds and workers had expressed concerns it would be lost.
Telecommunications company CyTA said it would put up €100 million on condition that other SGOs – namely the electricity company (EAC) also chipped in.
The EAC resisted until Patsalides told them that the state would default without the cash and would inevitably drag SGOs under as well.
Late on Monday, the EAC agreed to lend the government €100 million.
The ports authority put up another €38 million.
The money will be mainly used to pay civil servants’ salaries – December and 13th.
The cash-strapped state has come to a preliminary agreement with international lenders but it is not yet clear when it will be finalised for the first tranche to be released.