After Cyprus rejected the EU's bailout yesterday Cypriot finance minister Michalis Sarris has declared that he will not leave Russia until a deal is made. Talks on a possible loan from Russia are ongoing.
Our banking reporter Tim Wallace:
Cyprus’ finance minister flew to Russia to beg for a bailout – they have close economic ties and Moscow loaned the state €2.5bn in 2011.
But Eurozone leaders refused to sanction any bigger bailout from their funds, arguing Cyprus cannot cope if it is given any extra debt.
Analysts at OpenEurope believe a deal must be done this week if the country is to stay in the Eurozone.
“Cyprus will run out of cash on 3 June, when it has to repay a €1.4bn international bond,” the think tank said. “However, the decision will need to be taken long before that. Cypriot banks cannot stay closed for long but they cannot be reopened until a decision is taken.”
“Otherwise there will almost certainly be a deposit run.”