How controversial Cyprus bailout was agreed
With its banks on the brink of collapse, the Mediterranean island had to tow line
It was before dawn on Saturday when the ultimatum came. Just hours earlier, heads of state from across the EU had wrapped up an uneventful summit and headed home.
But the sense of stability proved short-lived. By the time the sun rose in Brussels, a meeting of eurozone finance ministers, the International Monetary Fund (IMF) and the European Central Bank (ECB) had unleashed a whole new misery upon the residents of one struggling eurozone outpost.
Cyprus was about to go broke, and its new President, Nicos Anastasiades, and his finance minister, Michael Sarris, needed a bailout of as much as €17bn for their banks, which had been hit hard by the crisis in Greece. They had made clear that they did not want ordinary Cypriots to bear the brunt, but as a tough night of negotiations got under-way after the main summit, Mr Anastasiades relented and agreed to a small levy on deposits of under €100k.
For Germany and its allies, however, that did not go far enough, according to in-depths reports on the talks in the Financial Times and Wall Street Journal.
As the gruelling negotiations went into the small hours of Saturday, a stark choice emerged for the Cypriot delegation: agree a deal which included raising up to €7bn immediately from investors large and small, or the ECB would cut its support to one of Cyprus' troubled banks, saddling the government with unmanageable debts and bringing the whole financial system crashing down.
A shell-shocked Mr Anastasiades tried to walk out of the meeting, but soon realised that he did not have a choice. With the banks on the brink of collapse, the Mediterranean island had to tow line of the IMF, Germany, Finland and Slovakia.
A deflated President Anastasiades told the nation on Sunday: “The solution we concluded upon is not what we wanted, but is the least painful under the circumstances.”
New UK station Russia Today gives a very bizarre view of Britain
Top Gear presenter is no stranger to foot-in-mouth controversy
New essay by JK Rowling went live on Pottermore site this morning
Review: Mike Leigh's biopic is a rambling, rich character study
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
Excellent Salary: Austen Lloyd: EAST MIDLANDS MARKET TOWN - A new and exciting...
£110 - £150 per day: Randstad Education Cambridge: An Academy based in Thetfor...
£115 - £140 per day: Randstad Education Cambridge: Randstad are currently work...
£60 - £65 per day: Randstad Education Leicester: Randstad Education Leicester ...