After ten hours of talks the deal was struck!
Eurozone finance ministers and IMF chief Christine Lagarde agreed to a ten billion euro bailout for Cyprus – seven billion short of what the island nation was asking for.
Cash-strapped Cyprus has now become the fifth country to turn to the eurozone for financial help in a bid to stave off bankruptcy.
Jeroen Dijsselbloem, Eurogroup Chairman:
“The Eurogroup considers that in principal financial assistance to Cyprus is warranted to safeguard financial stability in Cyprus and the euro area as a whole by providing a financial envelope which has been reduced to 10 billion euro.”
In return Cyprus must trim its deficit, shrink its troubled banking sector, raise taxes and privatise state assets.
The agreement still has to be approved by parliaments in several eurozone nations but everything should be completed by the end of the month.