Cyprus President Nicos Anastasiades and party leaders looked set to head for Brussels on Saturday for last-ditch crunch talks with the EU on measures aimed at staving off bankruptcy for the island.
The delegation would depart at lunchtime and return ahead of a deadline to adopt the measures aimed at raising 5.8 billion euros ($7.5 billion) needed to unlock a 10-billion-euro bailout, the official CNA news agency reported.
The Cyprus parliament finally gave its approval late Friday to at least three measures hammered out by the government in a desperate bid to secure the bailout from a troika of lenders by Monday's deadline.
The emergency session of parliament came as restive crowds, mostly bank employees anxious that their employers -- and therefore their jobs -- not be sacrificed in the deal, demonstrated outside.
A group of about 30 hooded youths burned a European Union flag next to the parliament building in front of police barricades.
"The haircut is robbery," they chanted, referring to the most onerous measure that has yet to be presented before parliament -- a tax on bank deposits that is still on the table.
MPs approved a solidarity fund to be set up through the nationalisation of pensions and capital controls to prevent a run on the island's banks when they are finally due to open on Tuesday after a more than week-long closure.
They also passed a restructuring plan drawn up by the central bank that will separate "good" debts from "bad" in the troubled banks, particularly in second largest lender Laiki Bank (Cyprus Popular Bank).
The most contentious of the measures is a levy on bank deposits, a deeply unpopular scheme parliamentarians have already rejected as "blackmail" once this week, albeit in a slightly different form.
However, with the deadline looming and the option of securing funding from elsewhere including from ally Russia exhausted, MPs have been forced to revisit it as an option to raise the 5.8 billion euros.
Commentators said the government wanted to hold further talks on its new plans for the "haircut" with the troika -- the EU, ECB and the International Monetary Fund -- before putting it to parliament.
And according to media reports on Saturday, the most likely scenario is a tax of 20-25 percent on deposits of more than 100,000 euros at the island's largest lender, the Bank of Cyprus.
Nicosia needs to seal the package by Monday or face being denied European Central Bank emergency funds in a move that would collapse the island's banks and devour its economy.
Acting ruling Disy party leader Averof Neophytou had appealed to MPs to back the measures, saying all deposits of up to 100,000 euros would be guaranteed.
Those with larger balances, however, might have to wait years to get all their money back, Neophytou said.
The plan would also secure some 8,000 jobs in Laiki Bank, although several hundred might be lost through restructuring.
Neophytou's plea came as the clock ticked down to a crucial meeting in Brussels on Sunday of eurozone finance ministers and IMF chief Christine Lagarde in a bid to finalise the rescue package before Monday's deadline.
"It'll be physical," one source told AFP.
German Chancellor Angela Merkel warned Cyprus against "exhausting the patience of eurozone partners," at a meeting Friday with the parliamentary group of her junior Free Democratic Party coalition partners, participants told AFP.
Some EU sources have said the bloc is ready to eject Cyprus from the eurozone to prevent contagion of other debt-hit members such as Greece, Spain and Italy.
Eurogroup president Jeroen Dijsselbloem said Friday he was awaiting fresh proposals from Nicosia to finalise a bailout plan "jointly" with the troika of lenders.
"The situation is very uncertain, we're waiting for Cyprus to propose alternatives," he said, adding: "Eurozone nations are putting a big sum of money on the table, Cyprus will also have to make its own contribution."
AFP
Sat Mar 23 2013
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