NICOSIA, Cyprus (AP) — Cyprus says it has no reason to consider privatizing state-owned companies now because it's not yet certain that its public debt burden would be too heavy to bear once it receives rescue money from international creditors.

Cyprus is negotiating a bailout of as much as €17 billion ($22.65 billion) — roughly equivalent to its annual economic output — with the so-called 'troika' of the European Commission, the European Central Bank and the International Monetary Fund.

The money is mostly meant to rescue its banks, which have taken huge losses on bad Greek debt investments. But Cyprus can only get a bailout if it is deemed to have a realistic chance at repaying the rescue loans. That will be determined by a yet-unfinished report on the recapitalization needs of the banks.

Government spokesman Stefanos Stefanou on Tuesday defended the left-wing government's opposition to privatizations in a speech to managers and employees of the state-owned Cyprus Telecommunications Authority.

He said Cypriot negotiators had rejected an initial demand by the troika that Cyprus commit to privatizations. Instead, the two sides agreed to include in a draft bailout agreement that selling state-owned companies would be considered only if the country's debt load is deemed unsustainable.

"We believe and we can strongly argue that even if the debt is not sustainable, there are other ways that it can be made so," said Stefanou. One such way, he said, is for Cypriot banks to receive money directly from the EU's bailout fund instead of through the government. That means the banks, not the government, would be responsible for repaying their rescue loans.

He said future revenues from significant, newly-discovered offshore natural gas deposits can also help the country manage its debt.

Stefanou said Cyprus is "obligated" for national security reasons to retain control of its telecommunications, electricity and ports authorities. Cyprus was split along ethnic lines in 1974 when Turkey invaded after a coup by supporters of union with Greece. Continued...