INTERVIEW-Cyprus FinMin won't rule out bailout privatisations

NICOSIA, Jan 18 (Reuters) - Cyprus's finance minister said on Friday he did not rule out privatisations if needed to seal a bailout for the island, and that it would make a debt even as high as 17.5 billion euros sustainable.

Vassos Shiarly also told Reuters in an interview the island had formally requested a five-year extension from Russia to repay a 2.5 billion euro loan due in 2016, and that a private sector writedown of Greek debt implemented in early 2012 was a mistake because of the upheaval it created in the euro zone.

Cyprus, one of the euro zone's smallest economies, applied for financial aid from the European Union and the International Monetary Fund in June last year after its banks were badly burnt by an EU-sanctioned write-down of Greek sovereign debt, imposed to make that country's debt pile more manageable.

"The Greek PSI (debt writedown) was a gift to Greece. We are not asking for a gift. We are asking for understanding, and a loan on fair terms so we can overcome these financial difficulties we are facing at the moment," Shiarly told Reuters.

(Reporting By Michele Kambas)