NICOSIA Cyprus may have difficulty paying public sector salaries in December unless a bailout deal is clinched and cleared by mid-November, a newspaper reported on Tuesday.
Citing confidential minutes of a meeting in parliament, the Politis daily quoted Finance Minister Vassos Shiarly telling politicians he was worried Cyprus would be "butchered" if international lenders treated it in isolation from other euro zone states in need of financing.
Meeting December's payroll commitments was contingent on the goodwill of bankers, he was quoted as saying.
Cyprus sought financial aid from the European Union and the International Monetary Fund in June, but the cash-starved island has still not concluded a bailout deal with lenders.
Excepts of the October 3 minutes published by the normally authoritative paper show Cypriot authorities clearly under-estimated the complexities of the process.
A deal should have been in place by October 20 to put the issue on the agenda of the November 12 meeting of euro zone finance ministers in Brussels, Shiarly told the lawmakers.
But Cyprus in fact only signalled it was ready to delve deep into a final round of talks last week, after preparing what it said were its own "counter-proposals" to an austerity package prepared by lenders in July.
At the October 3 meeting, and responding to a lawmaker's comment that Cyprus should be discussed with Spain and Greece because, if isolated, "Germany and Finland will tear us to pieces", Shiarly said:
"Yes. That is precisely their approach. Our case is indeed difficult, because some have very negative positions concerning Cyprus ... I'm inclined to believe that if we go on our own, naturally they will butcher us."
Shiarly said that if a deal were agreed Cyprus could get a first instalment of aid by December 24. Asked if Cyprus would manage until December, he said: "If needs be, we will have difficulties, but nothing can be absolute.
"I can't make predictions from now, because no banker would undertake a commitment on financing, even when times were good. I'm just saying its manageable."
(Writing By Michele Kambas; Editing by John Stonestreet)