Cypriot President, Nicos Anastasiades, held last-minute talks with international lenders on Sunday in an attempt to save the Mediterranean island from financial meltdown and possibly becoming the first country to leave the euro zone.
Reuters reported that with Cyprus facing a Monday deadline to avert a collapse of its banking system, Anastasiades met the heads of the European Union, the European Central Bank and the International Monetary Fund to try to craft a deal on a €10bn-bailout after a first attempt collapsed last week.
His government and Cypriot political parties remain divided, and late night talks in Nicosia broke up without a result after angry bank workers demonstrated to save their jobs.
Anastasiades flew to Brussels in a private jet sent by the European Commission ahead of a crunch meeting of euro zone finance ministers, which was put back to 8pm.
The key unresolved issues were how Cyprus should raise €5.8bn from its banking sector towards its financial rescue, and how to restructure the island’s overgrown banks.
The president and his team have a “very difficult task to accomplish to save the Cypriot economy and avert a disorderly default,” a Cypriot government spokesman said.
The EU’s economic affairs chief Olli Rehn said there were no good options but “only hard choices left” for the latest casualty of the euro zone crisis. With banks closed for the last week, the Central Bank of Cyprus imposed a €100-per day limit on withdrawals from cash machines at the two biggest banks to avert a run.
French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island’s business model as an offshore financial center that had failed.