Russian energy giant Gazprom has offered the Republic of Cyprus a plan in which the company will undertake the restructuring of the countrys banks in exchange for exploration rights for natural gas in Cyprus's exclusive economic zone, local media reported.

Representatives of the Russian company submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening, Sigma TV reported.

The proposal states that Gazprom will fund the restructuring of the countrys crippled financial institutions in exchange for substantial control over the countrys gas resources, meaning that Cyprus wont need to take the harsh bailout package offered by the EU.

The EU offered a EUR10bn rescue package to Cyprus with the condition of raising EUR5.8bn by taking a piece of every bank account in Cyprus. The originally proposed levies on deposits are 9.9% for accounts exceeding EUR100,000 and 6.7% on anything below that.

Cypriot President Nicos Anstasiades is not willing to discuss the Russians offer according to Newsit, whichcited an anonymous source close to the president. "The president is not going to discuss this plan because he wants a solution that will come from the EU," said the anonymous source.

Shortly after the rejection of the Gazprom proposal,Anatoly Aksakov,the head of the Association of Regional Banks of Russia and a member of the Board of the Central Bank of Russia, spoke to Interfax describing the countrys banking system as "not trustworthy" and advised Russian citizens "to withdraw their deposits from Cyprus."

Cyprus' parliament has postponed its decisionon whether it will go along with the tax. The vote that was due to take place on March 17 was pushed back to Monday, a holiday in Greece and Cyprus, when banks would be closed in any case.

Gazprom is the largest extractor of natural gas in the world and the largest Russian company.

Source: bne