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 (10 billion euro) bailout in order 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."
According to the Associated Press, the plan would also call for holders of bank deposits of more than 100,000 euros to take losses. The EU diplomats, speaking on condition of anonymity pending the official announcement, did not elaborate on how much large deposit holders would lose. Making them take a hit is expected to net several billion euros, reducing the amount of rescue loans the country needs.
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.
Banks in Cyprus had been closed all week, and Sunday a withdrawal limit of $130 was imposed on ATMs of the country's two largest banks. Many machines quickly ran out of cash, reports the AP.
If a deal had not been reached, the European Central Bank had threatened to cut emergency assistance to Cypriot banks, likely plunging the country into bankruptcy.