The Cypriot government has informed the eurozone countries that it is readying to seek financial assistance. This will make it the fifth eurozone country to do so.
In their respective reports BBC News, The Washington Post and USA Today stated the island nation needs €1.8 billion in order to recapitalize Cyprus Popular Bank, which is the most vulnerable bank to Greek government debt.
The Cypriot government has cited this reason in its statement where it explains that it requires financial assistance to alleviate "negative spillover effects through its financial sector, due to its large exposure in the Greek economy."
The amount Cyprus needs altogether for bailout, and the amount it will get, will be open for negotiation during a meeting of the 27 leaders of the European Union in Brussels on Thursday and Friday. Cyprus has already borrowed €2.5 billion from Russia. Russia was eager to provide this loan in part because Russian businesses have been allowed to do business in Cyprus's large offshore financial sector for a highly agreeable 10% corporate tax rate, a rate which the Cypriot government is still eager to keep low so as to continue to attract investors.
Large amounts of money in Cypriot banks have been lost on Greek government bonds, since Greece is Cyprus's biggest trading partner. Cyprus has therefore been affected in a profoundly negative manner by the Greek recession.
Cyprus is due to take over the EU presidency on July 1. The country follows Ireland, Greece, Portugal and Spain in seeking a bailout by the EU. The Cypriot government has not yet ruled out the possibility of seeking financial help from either China or Russia. This clearly indicates they want to keep all options on the table, this may be in case they don't get a preferable deal at the upcoming EU summit.