Cyprus has 4 days to find bailout solution

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Associated Press

Posted on March 21, 2013 at 12:02 PM

Updated Thursday, Mar 21 at 12:34 PM

NICOSIA, Cyprus (AP) — The European Central Bank has given Cyprus four days to agree on a new plan to raise funds to avoid bankruptcy. Otherwise, the ECB will pull the plug on the country's banks at the start of next week.

Facing the ultimatum, the Cypriot government is racing to put together a new package that can please both Parliament and the country's potential international creditors.

There have been long lines at ATMs in the capital, amid indications that a "Plan B" could include restructuring of Cyprus' troubled banks.

Banks have been shut since an initial bailout plan last weekend proposed raiding deposits. That plan raised howls of outrage and worries about a run on banks, which will remain closed until. ATMs have been functioning, but many have been running out of cash.

"Plan B" also could include some form of help from Russia. Nearly a third of deposits in Cyprus' banking sector are held by Russians.

Other possibilities being discussed include dipping into pension funds and accepting an offer from Cyprus' wealthy Orthodox church to contribute. Some form of tax on bank deposits also remains possible.

%@AP Links

132-a-07-(Jackson Wong, vice president, Tanrich Securities, in AP interview)-"two years ago"-Tanrich Securities Vice President Jackson Wong says traders have been waiting to see how Cyprus will avoid bankruptcy. (21 Mar 2013)

<<CUT *132 (03/21/13)>> 00:07 "two years ago"

APPHOTO XPK116: People wait to use the ATM of a closed branch of Laiki Bank in southern port city of Limassol, Thursday, March 21, 2013. The European Central Bank says it will keep emergency aid for Cyprus' troubled banks in place at least until Monday but will have to cut it off after that unless an international rescue program is drawn up. (AP Photo/Pavlos Vrionides) (21 Mar 2013)

<<APPHOTO XPK116 (03/21/13)>>

APPHOTO ATH103: Bank of Cyprus employees sit in front of riot police during a protest outside Greece's Finance Ministry as the bank remains closed for third day in central Athens, Thursday, March 21, 2013. Shares on the Athens Stock exchange rebounded Wednesday from heavy losses suffered over Cyprus' financial crisis, as a political spat erupted in Greece over whether the government is being too compliant with demands by its own rescue lenders. (AP Photo/Thanassis Stavrakis) (21 Mar 2013)

<<APPHOTO ATH103 (03/21/13)>>

APPHOTO ATH101: An employee of a security company carries a cash box to restock an ATM of the Greek branch of Cyprus Popular Bank as it remains closed for a third day in central Athens, Thursday, March 21, 2013. Shares on the Athens Stock exchange rebounded Wednesday from heavy losses suffered over Cyprus' financial crisis, as a political spat erupted in Greece over whether the government is being too compliant with demands by its own rescue lenders. (AP Photo/Thanassis Stavrakis) (21 Mar 2013)

<<APPHOTO ATH101 (03/21/13)>>

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