March 24 2013

President Nicos Anastasiades in Brussels for vital talks on the Cyprus. Time running out. Saturday’s deadlock. Anastasiades, Lagarde, Draghi to meet shortly. Eurogroup meeting at 5pm GMT. Archbishop of Cyprus to appeal to Russian businessmen…



Powered by Guardian.co.ukThis article titled “Cyprus in last-ditch bid to agree bailout – live” was written by Graeme Wearden, for guardian.co.uk on Sunday 24th March 2013 13.52 UTC

1.51pm GMT

Nicos Anastasiades has completed his talks with Jose Manuel Barroso and Herman Van Rompuy (Ian Traynor reports from Brussels).

The Cypriot president has now headed for talks with Mario Draghi, Christine Lagarde and Olli Rehn over lunch.

(so this crunch meeting of the main players is actually being split into at least two different sessions).

Updated at 1.51pm GMT

1.38pm GMT

Cyprus looking to Greece

Cyprus’s politicians are hoping that Greece will help fight its corner in tonight’s eurogroup meting:

Dimitris Papadakis, the secretary of EDEK, Cyprus’s social democrats (part of the opposition in parliament), said today that Cyprus want “substantial assistance” from Greek finance minister, Yannis Stournaras.

We need practical assistance from Greece because Eurogroup’s attitude continues to be that of a blackmail, and purely anti-European.

(more here)

However the views of Germany’s finance minister, Wolfgang Schäuble, will carry more weight tonight – and he has already warned that Cyprus could not avoid very tough times “not because of European stubbornness, but because of a business model that no longer functions”.

1.06pm GMT

Word from Brussels that president Nicos Anastasiades and his team of Cypriot officials and ministers have arrived, ready for this afternoon’s meeting:

Updated at 1.10pm GMT

12.45pm GMT

The daily cash withdrawal limit at Laiki Bank’s cash machines in Cyprus appears to have been cut from €260 per day to €100, according to Michelle Caruso-Cabrera of CNBC.

She just tweeted a photo showing a new warning sign being added:

UPDATE: Nothing official from Laiki yet, so it’s not clear if this is a general policy change.

• If anyone in Cyprus can confirm, please post below the line or email me at graeme.wearden@guardian.co.uk – thanks! •

Laiki’s ATM machines in Cyprus have been disbursing cash to a steady stream of customers in recent days:

Updated at 1.15pm GMT

12.33pm GMT

An EU spokesman has said European Council president Herman Van Rompuy will lead this lunchtime’s meeting between Cyprus and the EU. He hopes the talks can ease the way to a deal at tonight’s meeting of the eurogroup.

Via AP:

Van Rompuy’s role will not be to reach a final agreement, but to facilitate efforts to find a solution, spokesman Preben Aamann said.

Any new proposal would have to be approved Sunday evening by the Eurogroup, the gathering of finance ministers from the 17 EU countries that use the euro currency.

(updated)

Updated at 1.52pm GMT

12.22pm GMT

Meeting to begin at 1pm GMT

A crucial meeting will begin in Brussels in 45 minutes.

Nicos Anastasiades, Christine Lagarde, Mario Draghi, Herman Van Rompuy (EC president), Jose Manuel Barroso (European Commission president) and Olli Rehn (Commissioner for financial stability) will gather at 2pm (1pm GMT) to discuss the crisis.

As the Telegraph’s Bruno Waterfield explains here, the international lenders may force president Anastasiades to hammer his largest bank, the Bank of Cyprus.

Under the current plan, the Bank of Cyprus, will have deposits of more than €100,000 hit by a 20pc levy, while other banks will be hit for 4pc, in a desperate attempt to stave off financial meltdown.

The Bank of Cyprus must also absorb Laiki assets, insured deposits and take on its ECB debt – which could add up to €9.1bn – as the bank would be wound down.

In total Cypriot bank asset total €68bn, with deposits of more than €100,000 totalling €38bn. The Bank of Cyprus has over a third of bank deposits.

12.11pm GMT

Archbishop of Cyprus to plead with Russians

The Archbishop of Cyprus is planning to hold talks with Russian investors later this week in an effort to stop them fleeing the country, according to Greece’s Kathimerini today.

Archbishop Chrysostomos is hoping to remind them how they’ve benefited through their time in Cyprus:

The leader of the Church of Cyprus said after the Sunday mass in Nicosia that on Thursday he is going to host a dinner with the chiefs of Russian companies that are active in Cyprus to convince them against taking their money away from the island so that the situation does not deteriorate further.

He added that he intends to remind them that their capital has for a long time been growing through interest, they have benefitted from their presence in Cyprus and that had they gone to another country the interest they would have got would have been just above zero.

Chrysostomos also called for the previous Cypriot government (who ruled the island until last month) to stand trial for creating the current financial situation. And he added that Cypriot people must learn to live on tighter budgets as well.

So might the Church….

Updated at 12.11pm GMT

11.58am GMT

Saturday’s deadlock

A quick recap. Cyprus spent Saturday locked in negotiations with officials from the Troika in Nicosia, over how to raise its contribution to its bailout fund.

The talks centred on the Cypriot banking system — and the idea of a deposit tax (which was first agreed last weekend, then rejected by MPs on Tuesday, and now resurrected.)

There was a burst of excitement last evening after senior Cypriot official told Reuters that the parties had agreed to a 20% on deposits over €100,000 at Bank of Cyprus, and a 4% hit on €100k+ deposits at other banks.

But negotiations ended after midnight without a deal being announced, and the Cyprus government saying they had reached “a very delicate phase”.

Other officials blamed the ‘inflexibility’ of the IMF team for the deadlock, warning that “”we are not even near an agreement with the troika.”

There were rumours on Friday that the Troika had now hiked its demand on Cyprus, saying it must contribute €6.7bn to the bailout package, not the original €5.8bn.

The reason? Conditions in Cyprus have worsened since the bailout began. And the IMF can only lend to a country if it is confident it will get its money back.

While the two sides argued, Nicosia saw the largest protests since the crisis began last week. Here’s a couple of photos:

Updated at 12.48pm GMT

11.34am GMT

President Nicos Anastasiades is expected to meet with Christine Lagarde, head of the IMF and Mario Draghi, head of the ECB, this afternoon, to discuss the crisis enveloping the Cyprus by the hour.

He will also hold talks with presidents of the European commission and European council, Jose Manuel Barroso and Herman Van Rompuy.

Our Europe editor, Ian Traynor, reports from Brussels:

Anastasiades is expected to unveil new proposals to hit wealthy Cyprus banking clients with heavy levies on their deposits in order to come up with about one-third of the €17bn bailout the country needs.

A week ago he insisted on minimising the levy to less than 10% to prevent foreign investors, mainly Russians and British, pulling their money out of Cyprus. Now he is being forced to double that levy to 20%, according to reports from Nicosia late on Saturday, while sparing all savers with less than €100,000.

More from Ian here.

Updated at 11.34am GMT

11.22am GMT

Cyprus president in Brussels for crucial talks

Cyprus’s future in the eurozone could be decided today as president Nicos Anastasiades flies into Brussels for crucial talks over its bailout package, in an effort to avert financial catastrophe.

With time running out, Cyprus and its Troika of lenders have just hours to agree a deal, An emergency meeting of eurozone finance ministers and the International Monetary fund begins at 6pm Brussels time (5pm GMT), and should determine whether Cyprus receives its desperately needed €17bn loan package.

Failure would put the country’s future in the eurozone at grave risk, with vital liquidity provided by the European Central Bank due to be withdrawn on Monday.

According to reports last night, Cyprus may impose a 20% levy on deposits over €100,000 at its biggest lender, the Bank of Cyprus, with other large depositors losing around 4%.

A government spokesman has already warned that Anastasiades is tackling a huge challenge. He said the Cypriot team in Brussels face:

a very difficult task to accomplish to save the Cypriot economy and avert a disorderly default if there is no final agreement on a loan accord.

We’ll be following the action in Brussels, and in Cyprus, through the day.

Updated at 11.26am GMT

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