Cyprus trying to avoid bankruptcy
NICOSIA, Cyprus (AP) — Cyprus officials and international representatives were caught up in tortuous negotiations late into the night Saturday as they sought to forge a plan to raise the money the island nation needs to qualify for a bailout package. Failure would mean Cyprus could declare bankruptcy in just three days and possibly have to exit the eurozone.
It was not clear how far the two sides were getting: the information seeping out was conflicting.
Late in the evening, a finance ministry official said an accord was “very close”, and would likely include a hefty tax of a fifth to a quarter of deposits over euro100,000 at the country’s troubled largest lender, Bank of Cyprus. But a banking official with knowledge of the talks said no deal was in the offing and wouldn’t likely arrive before today.
Both spoke on condition of anonymity because negotiations were ongoing and they were not authorised to release details.
Meanwhile, the state-run Cyprus News Agency quoted an anonymous top official as saying an agreement was not within sight because of the “rigid stance” by the representative of the International Monetary Fund (IMF).
Cyprus has been told it must raise euro5.8 billion (US$7.5 billion) in order to secure euro10 billion in rescue loans from other European countries that use the single currency, as well as from the IMF.
The IMF, European Central Bank and European Commission — known as the troika — will determine whether the plan that the Cypriots devise will meet the requirements for any international bailout package. Then, the plan is to be presented to the eurozone finance ministers for final approval.