EU awaits "Plan B" as Russia rebuffs Cyprus | business | Hindustan Times
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EU awaits "Plan B" as Russia rebuffs Cyprus

business Updated: Mar 22, 2013 22:30 IST

Russia rebuffed Cypriot entreaties for aid on Friday, leaving the island's increasingly isolated leaders scrambling to strike a bailout deal with the European Union by next week or face the collapse of its financial system.

In Nicosia, lawmakers considered proposals to nationalise pension funds, pool state assets and split Cyprus's second-largest bank to satisfy exasperated allies.

The governor of the Central Bank, Panicos Demetriades, warned political leaders the country would face bankruptcy on Tuesday unless they appro-ved the bills, an official said.

Even if measures are appro-ved, there was no confirmation they would raise the €5.8 billion demanded by the EU for a €10 billion bailout to avoid default.

Hundreds of protesters rallied outside the parliament and depositors, who began raiding cash machines last weekend, queued to withdraw all they could.

The clock was running down to a Monday deadline set by the ECB for a deal to be in struck before it cuts funds to Cyprus's stricken banks, potentially pushing it out of EU's single currency.

Nicosia rejected a proposed levy on tax deposits in exchange for EU aid on Tuesday and turned to Russia for help.But Russian finance minister Anton Siluanov said Russian investors were not interested in Cypriot gas and that talks had ended without result.

JP Morgan likened it to "a national fire sale", and Germany indicated it opposed the nationalisation of pension funds.