Cyprus, creditors secure preliminary bailout agreement
French Minister of Economy, Finances And Foreign Trade Pierre Moscovici (R) and IMF chief Christine Lagarde (L) chat next to EU Commissioner for Economic and Monetary Affairs Olli Rehn (C) prior to a eurozone meeting in Brussels on March 24, 2013.
Cyprus and international lenders have reportedly reached a preliminary bailout agreement to save the cash-strapped island nation from bankruptcy.
European Union sources said that the agreement between Cyprus, the International Monetary Fund and the European Commission was reached early on Monday in Brussels. The deal paves the way for the country to receive a 10-billion-euro ($13 billion) bailout.
Later in the day in another meeting in the same building in Brussels, the eurozone's finance ministers also approved the deal.
The sources said that the deal will include a tax of up to 40 percent on deposits of over 100,000 euros in Cyprus’s two biggest banks.
The country’s banks are shut nationwide until March 26 to prevent cash withdrawals, prompting people to form long lines at cash machines, which only dispense a lowered daily amount of 260 euros for each individual account.
The 10 billion euro bailout would also save Cyprus from bankruptcy and possibly guarantee its future in the 17-nation eurozone, reports say.
People in Cyprus have taken to the streets to protest the bailout deal. The protesters gathered outside the parliament in the capital Nicosia.
Cypriot protesters denounced their government, the EU and the IMF for their austerity policies. Similar rallies were also held outside the EU headquarters in the capital.