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Cyprus Popular Bank chief says island will have to seek EU bailout money to recapitalize banks
NICOSIA, Cyprus (AP) ' The chairman of Cyprus Popular Bank, the country's second-largest lender, says the eurozone country will "realistically have to seek" EU bailout money in order to recapitalize its Greece-exposed banking sector.
Michalis Sarris, a former finance minister, said in an interview Friday that there's no longer a stigma attached to asking for EU bailout cash.
He said turning to the EU bailout fund now with a convincing plan to cut spending would pre-empt much tougher austerity measures the country may be forced to enact later.
The government last month underwrote a '1.8 billion ($2.3 billion) equity issue to help the bank raise capital from private investors. However, state coffers are running dry because Cyprus is unable to borrow from international markets after two credit ratings agencies downgraded it to junk status.