Cypriot bailout talks on brink

Negotiations on a bailout that would prevent Cyprus becoming the first eurozone economy to go bankrupt were tortuous and on the brink last night, with all of the possible outcomes still threatening to bring down the country.

Finance Minister Michael Noonan was adamant that, whatever the outcome, it would not affect Ireland. He insisted the Government would never hit depositors.

“We believe that the €100,000 is absolutely sacrosanct and there is absolutely no circumstance in which we would touch depositors, because they are guaranteed,” he said.

But as Cypriot president Nikos Anastasiades battled with the EU/IMF/ECB over the conditions for a €10bn bailout, the chances of his country’s economic survival reduced.

Mr Noonan acknowledged on his way into the meeting: “The position has deteriorated in the week because the uncertainty always creates greater difficulties, so it’s not going to be easy.”

The Cypriot president, in the job less than a month, was reported to have threatened to resign over IMF demands that emergency funding from the ECB be part of the banks’ debt.