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Eurozone member Cyprus conceded on Tuesday that there is a serious possibility it may need an EU bailout to save its banking system, which is heavily exposed to Greek debt.

“The possibility of addressing the financial stability mechanism to support the banking system, due to the problems created by excessive exposure of banks to Greece, is a serious possibility,” deputy government spokesman Christos Christofides told reporters.

He said the government was looking at various ways to support the banks, which included finding a loan “from elsewhere.”

Cyprus has already secured a 2.5 billion euro ($3.2 billion) low-interest loan from Russia to cover its refinancing needs for this year.

The recession-hit economy is struggling with record unemployment, austerity measures and trying to rein in a deficit twice the EU accepted limit of three percent of GDP.

The government is committed to getting its bloated deficit to below 3 percent this year from 6.4 percent in 2011.

But it is reluctant to introduce deeper public cuts to drastically slash the deficit.

“Cyprus will not go to the support mechanism because it has a fiscal deficit of 2.5 or three percent -- if we finally apply. This must be crystal clear, it will be to support the banking system,” said Christofides.