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This is an archive article published on March 23, 2013
Cyprus eyes bailout deal,U-turn on levy
Cyprus was just hours away from a deal on Friday to raise billions of euros and unlock a bailout from the European Union that could avert financial meltdown and exit from the euro,its ruling party said
Written by Reuters
March 23, 2013 02:50 AM IST
2 min read
2 min read
Cyprus was just hours away from a deal on Friday to raise billions of euros and unlock a bailout from the European Union that could avert financial meltdown and exit from the euro,its ruling party said.
The remarks came after Moscow had rebuffed requests from Nicosia for assistance to save Cypriot banks in which Russians have billions at risk and at least one euro zone minister,Finlands Alexander Stubb,said an EU accord would be reached.
Averof Neophytou,deputy leader of the ruling Democratic Rally party,said Cypriot political leaders were close to a compromise that would let parliament reverse its rejection of a rescue package offered by euro zone partners a week ago under which holders of bank deposits would suffer losses. Finance minister Michael Sarris,returning empty-handed from Moscow,said a bank deposit levy was back on the table.
Germany warned Cyprus it was playing with fire,with the clock running down to a Monday deadline set by the European Central Bank when it will sever essential cash flows to Cypriot banks if no bailout programme is agreed. Neophytou said there was cautious optimism that in the next few hours we may be able to reach an agreed platform consistent with the framework originally agreed with the EU.
Loss of the ECB lifeline would cause the banking system to collapse and could force Cyprus to give up the euro.
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