It’s increasingly likely that Cyprus is the next domino in the euro crisis. Today, Reuters announced the country is looking for a bilateral loan rather than bailout aid from the Troika to recapitalize it 2nd largest bank. Good luck with that one 😉

Cash-strapped Cyprus has shifted its focus onto a bilateral loan instead of an EU bailout to recapitalise its second largest bank although both options are still open, media reported on Wednesday.

The euro zone minnow, shut out of capital markets for more than a year, must find the equivalent of 10 percent of its GDP by June 30 to recapitalise Cyprus Popular Bank if no private investor comes forward.

Bilateral lending, which the island’s finance minister has repeatedly described as “not the preferred option” is coming back to the forefront as a likely scenario.

Cyprus is looking for a rich uncle. Failing that, they’ll have to resort to checking down the back of the couch again.

Russia, which bailed Cyprus out last year, was back in the frame as a potential lender, newspapers reported.

Efforts were underway to borrow from a third country with “more favourable terms”, Haravghi, the mouthpiece of Cyprus’s ruling AKEL Communist party, reported in a front-page headline. It did not offer more details.

Asked whether the prospect of bilateral lending was distant, Finance Minister Vassos Shiarly told state TV in an interview on Tuesday night; “I would say not.”

The cause of the banks losses was Greece’s writedown of its debt earlier in the year. It just show how fragile european banks are and begs the question which bank is next as we are hearing more and more now of banks needing assistance.

Popular and the other main bank, Bank of Cyprus were hit heavily by the writedown on Greek debt. Bank of Cyprus has almost completed its recapitalisation privately.

Moody’s Investors Service on Tuesday cut the credit rating of Bank of Cyprus, and put Popular on review for a downgrade, citing the increased risks of a possible Greek exit from the euro zone..