The cash-strapped island nation of Cyprus has secured a rescue package following negotiations that stretched into the early morning hours of Monday, in order to save the country’s banking system from collapse.
Cyprus was in need of $13 billion to revive its ailing banks and keep the nation’s government running.
Details of the deal are still emerging, reports the New York Times:
“The emerging deal, struck after hours of meetings in Brussels, still needs to be approved by the 17 finance ministers from countries using the euro. It would drastically prune the size of the country’s banking sector, whose size, largely built on the deposits of wealthy Russians, dwarfs the size of the tiny island nation’s economy.
The deal would scrap the highly controversial idea of a tax on bank deposits, although it would still require forced losses for depositors and bondholders.”
Last week, Cypriot lawmakers rejected a highly unpopular proposal put forward by the European Central bank, the European Commission and the International Monetary Fund to give the country’s banks half of a $13 billion bailout package if they can raise the other half from a steep levy on the country’s personal savings accounts.
If a deal had not been reached, the European Central Bank had threatened to cut emergency assistance to Cypriot banks likely plunging the country in bankruptcy.
This is a breaking news story and will be updated.