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Journalism of Courage
Cypriot politicians turned to the European Union on Sunday in a last-ditch effort to help their island nation forge a viable plan to secure an international bailout after failing for a week to find a solution to a crisis that could force their country into bankruptcy.
Politicians were under pressure to come up with a solution quickly. The European Central Bank has threatened to stop providing emergency funding to Cyprus banks after Monday if there is no agreement on a way to raise 5.8 billion euros 7.5 billion needed to get a 10 billion euro rescue loan package from the International Monetary Fund and the other European countries that use the euro currency.
Despite that risk,Europes biggest economy maintained a hard line on the negotiations. German Finance Minister Wolfgang Schaeuble said in an interview if possible we want to avoid seeing Cyprus sliding into insolvency. But he cautioned that he is known for not giving in to blackmail,by nobody and nothing.
Heading into a decisive meeting of euro zone finance ministers on the issue in Brussels,Schaeuble said an agreement can be reached if Cyprus meets creditors demands.
Cypriot President Nicos Anastasiades and his finance minister were meeting with representatives of the troika of international creditors the International Monetary Fund,the European Central Bank,and the European Commission,the EUs executive arm to work out final details,officials said.
A plan agreed to in marathon negotiations earlier this month called for a one-time levy on all bank depositors in Cypriot banks. But the proposal ignited fierce anger among Cypriots and failed to garner a single vote in the Cypriot Parliament.
The idea of some sort of deposit grab has returned to the fore after attempts to gain Russian financial aid failed this past week,with deposits above 100,000 euros at the countrys troubled largest lender,Bank of Cyprus,possibly facing a levy of up to 25 per cent.
Cyprus central bank has imposed a daily withdrawal limit of 100 euros 130 to prevent a bank run by depositors worried about their savings. The limit went into effect Sunday.
To avoid collapse of its banking system,Cyprus needs significantly more than the 10 billion euros international creditors are willing to lend it.
