Cyprus Strikes Deal, Avoids Bankruptcy
Those holding largest deposits will take a hit
By Newser Editors and Wire Services
Posted Mar 24, 2013 9:04 PM CDT
A private security officer, center, guards a branch of a Bank of Cyprus in the city of Limassol, Cyprus, early Monday.   (AP Photo/Pavlos Vrionides)

(Newser) – 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.

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Showing 3 of 9 comments
milosleubner
Mar 25, 2013 5:23 AM CDT
If GoldmAN-Sachs were allowed to melt the way dirty snow in New York does we would have only be better for it now. Nothing will happen in Cypres if they go bankrupt today ,nothing at all. The sheep in the hills will keep calm and collected ,the wine will b e made and tasted just like it have been for a couple thousand years already. Angela and Franc Hollander will loose their poker faces and Czechs, who don't do euro ,will keep on smiling widely.
milosleubner
Mar 25, 2013 12:22 AM CDT
and this is what the credit out of order would do to naive individuals and sold-out governments .This is how you take over the country , ,You destroy the locals with a most of wealth - just like they are doing to people in Cypres now,those who slaved and saved all their lives , then you replace them with "investors" who will became the ruling class having nothing of the intelligence ,know how , compassion and understanding of the life on this island.. Do you know that Islam forbids charging of an interest on money you loan to another? It may have something to do with their hatred of the Jews..Except that those Jews who don't own banks get screwed in their asses as well as everybody else. European Union is a totalitarian dream coming true. .New World Order reaches over the heads of any human being ,even though some of us try to save their hides by cooperating. with the Liar . Anyone of us can step out of this charade by becoming an individual finger of the Creator and ,not the worshiper of the Gods of our own image.,the Mind Gods. of power and old books and not happines and light.
SC23
Mar 24, 2013 11:12 PM CDT
Seems kinda funny there wasnt as much banking crap, failures, and bailouts over there until the EU and Euro got going.. Its almost like theres some kinda crippling fiscal plan at work... either that or they are really really sucking at the whole central bank thing.