Eurozone finance ministers and the International Monetary Fund struck a deal early Saturday to bail out Cyprus with aid of up to 10 billion euros, diplomats said after some 10 hours of talks.
The debt rescue will involve "up to 10 billion euros," said one diplomatic source, whereas the initial request from Nicosia last year was for some 17 billion euros.
The official said that the IMF would participate to the tune of one billion euros ($1.3 billion) in loans under the agreement.
Under the deal, deposits in Cypriot banks would be hit with a one-off "levy" of up to 9.9 percent, depending on the amounts held.
At the same time, a "withholding tax" will be imposed on interest on bank deposits, in a further hit for private investors in the Cypriot banking system.
Monday is a bank holiday in Cyprus so it will be Tuesday before depositors will be able to react.
The talks dragged on as the Cypriot government fought to avoid such a "bail-in" or haircut for the banks, which Nicosia argued would trigger a run on its banks and ricochet on through the wider eurozone financial system.
Cyprus -- which accounts for just 0.2 percent of the combined eurozone economy -- thus becomes the fifth member state to secure a debt rescue package from its eurozone partners in the three-year debt crisis.
The price tag is very small compared with two rescues for Greece worth some 380 billion euros ($496 billion), Ireland's 85 billion euros, Portugal's 78 billion and 41 billion for Spanish banks.
Cyprus President Nikos Anastasiades attended the talks, as well as European Central Bank head Mario Draghi.
IMF managing director Christine Lagarde had stressed beforehand the need for a watertight solution.
"We don't want a bandaid (solution). We want something that lasts, that is durable and sustainable," Lagarde said on her arrival.
"We have underlined with Wolfgang Schaeuble that we want to see an aid programme drawn up before the end of March, we are within that schedule," added French Finance Minister Pierre Moscovici, referring to his German counterpart.
Eurogroup head and Dutch Finance Minister Jeroen Dijsselbloem said the package was designed "to make sure that there is stability in the eurozone and that there is a new sustainable growth path possible for Cyprus.
Cyprus, whose banks were badly exposed to their failed peers in Greece, sought a bailout in June 2012 but negotiations proved difficult, with the country hoping to get help from Russia with whom it has strong ties.
Cyprus Finance Minister Michalis Sarris will reportedly fly to Moscow for talks Monday about extending a 2.5-billion-euro Russian loan payment due in 2016.
Russians are among the biggest investors in Cyprus, and hardline lenders like Germany had pressed for months for a clampdown on banks' alleged involvement in money laundering.
The total annual output of the Cypriot economy is 17 billion euros, and the IMF was concerned that a bailout on that level would take the country's debt burden to unsustainable levels.
AFP
Sat Mar 16 2013


Ramsay reveals hundreds of lucky cat statues stolen from new restaurant
Gordon Ramsay says about 477 Japanese cat models called maneki-neko were stolen from his Lucky Cat 22 Bishopsgate restaurant.

Zayn Rayyan case: Two child witnesses complete testimony today
So far, 20 prosecution witnesses, including the two children, have been called for this trial, according to the Deputy Public Prosecutor.

Macron says he will tell Trump not to be weak with Putin in Washington visit
Emmanuel Macron says showing any weakness to Russia's Vladimir Putin would make it harder to deal with China and Iran.

Israeli PM Netanyahu says Hamas will pay for not returning Shiri Bibas
Netanyahu accuse Hamas of acting "in an unspeakably cynical manner" by placing body of a Gaza woman in the coffin instead of Shiri Bibas.

Trump pulls US out of key global climate assessment, sources say
The US is a co-chair along with Malaysia of a working group on climate mitigation, or ways to reduce greenhouse gas emissions.

Japan to court Tesla on Nissan investment, FT reports
The group hopes Tesla will invest strategically, believing it's interested in acquiring Nissan's US plants, the report says.

185 children linked to GISB handed over to families - Exco
The children have been handed over to their families on bond with conditions by the court.

IRS fires 6,000 employees as Trump slashes US government
The move will eliminate roughly 6% of the agency's workforce in the midst of the busy tax-filing season.

Elon Musk wields chainsaw at conservative gathering, a gift from Argentina's Milei
This is the chainsaw for bureaucracy, says Elon Musk.
![[OPINION] For never again the world must know more about the Khojaly genocide [OPINION] For never again the world must know more about the Khojaly genocide](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2025-02/41740112820_KhazarUniversity.jpg)
[OPINION] For never again the world must know more about the Khojaly genocide
For Azerbaijanis, the Khojaly genocide is more than a historical event - it is a collective trauma that shapes their identity and worldview.

Israeli military says body released by Hamas is not of a hostage
Two bodies were identified as infants, but a third, believed to be their mother, Shiri, didn't match any hostage and remains unidentified.

Key takeaways from Trump-Putin talks: Ukraine, energy, NATO, sanctions
Here's what is known so far about what was discussed.
![[COLUMNIST] Whose rights? Islam, eurocentrism and the limits of human rights [COLUMNIST] Whose rights? Islam, eurocentrism and the limits of human rights](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-09/41726025526_UnitedNations.jpg)
[COLUMNIST] Whose rights? Islam, eurocentrism and the limits of human rights
For as long as rights are understood on Occidental terms, problems would inevitably remain. What is needed is an appreciation of diversity.

Argentina court clears 3 accused in singer Liam Payne's death
The court upheld the pre-trial detention of a hotel employee and a restaurant waiter held since last month.

Spanish ex-soccer boss Rubiales sentenced to pay fine over kiss without consent
Court also acquits Luis Rubiales' three co-defendants accused of attempting to coerce Jenni Hermoso into saying the kiss was consensual.

King’s health significantly improved after treatment - PM
Datuk Seri Anwar Ibrahim says he had the opportunity to seek an audience with the King twice during his official visit to Bahrain.

Why Trump wants the US Department of Education shut down
The vast majority of US children attend the country's free public schools, which are a big employer and economic engine.

How did a jet flip upside down on a Toronto runway and everyone survive?
Here is what we know about this accident and similar crashes.

TIMELINE - Trump's remarks on plan to take over Gaza, displace Palestinians
The plan has been condemned globally, with Palestinians, Arab nations and rights experts saying it was tantamount to "ethnic cleansing."

'No to drugs' signboards mooted as condition for concert permit
Datuk Hussein Omar Khan says it was part of their recommendations as efforts to curb drug taking at entertainment events.