Cyprus

The International Monetary Fund's executive board approved a $1.3 billion (853.7 million pounds), three-year loan to Cyprus on Wednesday, part of a larger international bailout to help the Mediterranean country avoid defaulting on its debt, Reuters reported. But IMF Managing Director Christine Lagarde said Cyprus's bailout was subject to "substantial risks," as the economy is likely to contract for the next two years. "The macroeconomic outlook is subject to high uncertainty and risks to the program are substantial," Lagarde said in a statement. "There is no room for implementation slippages.

Cypriot lawmakers narrowly approved the island's €10 billion ($13 billion) bailout deal, paving the way for the country to receive its first installment of aid in a few weeks—as the country now turns to the daunting task of restructuring its devastated economy, The Wall Street Journal reported. The loan agreement was approved by 29 lawmakers in the country's 56-member legislature, with 27 votes against the deal. As expected, Cyprus's main opposition party, Communist AKEL, and its junior ally, the Socialist EDEK party, voted against the agreement.

Cyprus's parliament decides on Tuesday whether to back a bailout imposed by its EU partners, with approval likely from a thin majority against mounting calls for the island to exit the euro, Reuters reported. Lawmakers were due to meet in an extraordinary session at 4 p.m. (1300 GMT) to ratify the terms of the aid, which is conditional on Cyprus winding down its second-largest bank and slapping heavy losses on uninsured depositors in another.

Russia wants to play a bigger part in talks over solving Cyprus' financial problems but will only restructure its loan to the island if its interests here, especially those related to VTB Bank, are protected, Moscow's finance minister said, CyprusMail reported. Russian banks and companies have poured money into Cyprus since the 1990s, taking advantage of low taxes and relaxed business regulations.

German lawmakers approved a rescue for Cyprus as Finance Minister Wolfgang Schaeuble warned that refusing aid to a fifth crisis-ravaged state risked triggering a sovereign default and contagion to other euro nations, Bloomberg reported. The lower house, or Bundestag, backed German participation in the 10 billion-euro ($13 billion) financial lifeline by 487 votes to 101 with 13 abstentions in Berlin today, almost three years after the euro-area debt crisis first required lawmakers to act in May 2010. Lawmakers also approved extending aid terms for Ireland and Portugal.

A Russian depositor has filed suit for the seizure of all assets in Russia belonging to Laiki Bank of Cyprus, including its controlling stake in Russia’s Rosprombank, which may now hamper a Cypriot plan to sell off the shares, RT.com reported. Presnensky Court in Moscow has received a lawsuit from ‘Y. G. Borisov’ against Laiki Bank – which operates in Russia under the Cyprus Popular Bank brand – and Rosprombank, in which Cyprus owns a 50.4 percent stake. Borisov has demanded the repayment of money that was seized from his account with the Cypriot bank; the exact sum was not disclosed.

The cost of bailing out Cyprus has swollen to euro 23 billion ($30 billion), with the crisis-hit country having to take on the lion's share of the measures needed to avoid bankruptcy, according to a draft document by the country's international creditors. The draft document, obtained by The Associated Press Thursday, says the country will have to find 13 billion euros ($17 billion) - an increase on the 7 billion euro contribution agreed during the country's chaotic bailout talks last month.

Cyprus has agreed to sell gold worth €400m from its reserves as a contribution to an international bailout, roiling the precious metal markets as investors feared it could set a precedent for other troubled eurozone countries. Nicosia’s plan to dispose of most of its gold holdings would be the first such sale by a country seeking international assistance since the Asian financial crisis in 1997-98, when South Korea asked the public to donate jewellery to the central bank for the good of the nation.

Cyprus yielded only to rich Luxembourg among euro-area countries in household wealth rankings as recently as 2010, while Germans were the statistical paupers in the bloc, according to data released by the European Central Bank on Tuesday, the Financial Times reported. The study, the first of its kind, is bound to fan indignation in Germany and other northern members of the currency union who see themselves as being the paymasters for heavily indebted southern countries, like Cyprus, Greece, Spain and Portugal, that have all sought international bailouts.

The sudden tumble of Cyprus from sun-kissed prosperity into bleak penury must certainly have felt precipitate to many of its citizens – more like a scalping than a haircut, the Financial Times reported. But the collapse is not really the result of a random lurch or shift in axis. It is the end of a path traced in a long, complacent arc of ease and sleaze that hit a wall. It is almost 40 years since the east Mediterranean island was traumatised by partition.