Head of Cyprus' central bank says country is struggling to find €1.8B to save Cyprus Popular Bank, may have to ask for European Union assistance

Cindy Allen

NICOSIA, Cyprus , June 4, 2012 (Associated Press) – Cyprus' central bank chief says the country is increasingly likely to have to ask for EU bailout money to help rescue its banking sector.

Panicos Demetriades has told the Financial Times in an interview Cyprus is struggling to find €1.8 billion ($2.23 billion) to inject in the second-largest lender, Cyprus Popular Bank, by a June 30 deadline.

He said "it is hard to see where (the money) is coming from, if not Europe."

The bank is the most exposed to Greek debt and suffered huge losses after writing down the value of its Greek government bond holdings.

The government last month underwrote a €1.8 billion equity issue to help the bank recapitalize with private money, but will have to put up the cash itself if the bank can't find investors.

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