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Cyprus in Crisis Talks with EU over Bailout

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EU and ECB officials meet Cypriot finance minister as president prepares for another round of talks in Brussels.

Cyprus - President Nicos Anastasiades

Cyprus – President Nicos Anastasiades

(Al Jazeera) – Cyprus’ president, Nicos Anastasiades, is due to meet European Union officials to discuss ways of securing a crucial bailout for his island nation’s troubled banking sector.

Anastasiades’ trip to Brussels comes as the deadline given to Cyprus by the European Central Bank (ECB) to raise $7.5bn to qualify for the $13bn bailout is due to expire on Monday.

The president is expected to present a revised package to the country’s prospective creditors, its fellow countries that use the euro currency and the International Monetary Fund. There has been no indication yet that they will accept it.

Al Jazeera’s Peter Sharp, reporting from the capital, Nicosia, said the drive to secure the bailout “still has a course to run”.

“The talks are continuing and there’s a hope that they’ll come up with a deal before the banks are due to open on Monday morning,” said our correspondent.

He said members of the “troika” – the ECB, IMF and the European Commission – were meeting the finance minister and his team, “going over the bills that were passed on Friday”.

The president would then decide to travel to Brussels on the basis of the outcome of that meeting, said our correspondent.

Cypriot legislators approved three key bills that aim to raise enough money to qualify the country for the bailout.

A total of nine bills were approved on Friday, including a key one on restructuring the country’s ailing banks, which lost billions on bad Greek debt.

Another bill is on restricting financial transactions in times of crisis and a third would set up a ‘solidarity fund’ into which investments and contributions will flow.

More bills to meet the total target of $7.5bn Cyprus needs to secure an international $13bn bailout will be brought for a vote over the weekend.

They include a crucial one that would impose a tax of less than 1 percent on all bank deposits, said Averof Neophytou, deputy head of the governing DISY party.

“We are voting for the least worst option,” Neophytou said in a speech. “We owe an apology to the Cypriot people because we all share in the responsibility of bringing this place to this state.”

Approval of the tax would come just days after parliament decisively turned down a plan that would have seized up to 10 percent of people’s bank deposits.

The plan triggered an outcry from people who condemned it as an unfair grab of their life savings.

Politicians said it would cause irreparable damage to the country’s financial centre status.

Ordinary Cypriots say they would willingly sacrifice a portion of their savings to save the country – just as long as somebody does not impose it on them.

“If we have Europe’s support so our banks won’t collapse, I wouldn’t have a problem with a deposit tax,” said pensioner Demetrakis Papanicolaou, 64.

“But we need to hear this not only from our government, but from the Europeans.”

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