Crisis averted, for now. Cyprus has secured a package of rescue loans in tense, last-ditch negotiations, two EU diplomats said, saving the country from a banking system collapse and bankruptcy. The cash-strapped island nation needs a $13 billion bailout to recapitalize its ailing lenders and keep the government afloat. The European Central Bank had threatened to cut crucial emergency assistance to the country's banks by Tuesday without an agreement.
The finance ministers of the 17-nation eurozone accepted the plan reached in 10 hours of negotiations in Brussels between Cypriot officials and the so-called troika of creditors: the International Monetary Fund, the European Commission, and the ECB. Under the plan, Cyprus' second-largest bank, Laiki, will be restructured and holders of bank deposits of more than 100,000 euros will have to take losses, the diplomats said. They did not elaborate on how much large deposit holders would lose. Cyprus resisted pressure by creditors to also unwind the country's largest lender, Bank of Cyprus, the diplomat said.