"Cyprus clinched a last-minute solution to avert imminent financial meltdown early Monday after it agreed to slash its oversized banking sector and use funds raised by seizing bank assets from large deposit holders -- which in some cases could amount to 40 percent -- in troubled banks to secure a 10 billion euro ($13 billion) bailout.
The deal, described by the country's politicians as "painful," was
agreed with euro finance ministers in Brussels just in time. The
European Central Bank had threatened to cut off crucial emergency
assistance to the Cyprus' embattled banks after Monday if no agreement
Without that funding, Cyprus' banks would have collapsed, dragging
the country's economy down with them and threatening the small
Mediterranean island's membership of the 17-strong group of European
Union countries that use the euro -- all of which would have sent the
EU's markets spinning.
"It's not that we won a battle, but we really have avoided a
disastrous exit from the eurozone," Finance Minister Michalis Sarris
said in Brussels."