The Cypriot president is expected in a snow-bound Brussels later on Sunday for a showdown with European governments and the International Monetary Fund that is likely to determine whether the island, teetering on the brink of insolvency, becomes the first country to be kicked out of Europe’s single currency.
Nicos Anastasiades is to see Christine Lagarde of the IMF and Mario Draghi, head of the European Central Bank, as well as the presidents of the European commission and European council, Jose Manuel Barroso and Herman Van Rompuy, who have cancelled an EU-Japan summit to return to Brussels because of the Cyprus emergency.
Anastasiades is expected to unveil new proposals to hit wealthy Cyprus banking clients with heavy levies on their deposits in order to come up with about one-third of the €17bn bailout the country needs.
A week ago he insisted on minimising the levy to less than 10% to prevent foreign investors, mainly Russians and British, pulling their money out of Cyprus. Now he is being forced to double that levy to 20%, according to reports from Nicosia late on Saturday, while sparing all savers with less than €100,000. With the stakes never so high for Cyprus, the European Central Bank is threatening to pull the plug on short-term funds propping up the Cypriotfinancial sector on Monday unless a last-minute deal is struck that satisfies the island’s increasingly hawkish eurozone creditors, led by Germany.