Cyprus

A fifth euro zone country turned to Brussels for emergency funding on Monday when Cyprus announced it was seeking a lifeline for its banks and its budget, hours after Spain submitted a formal request to bail out its banks, Reuters reported. Global share prices and the euro slid as investors bet that European leaders - due to meet this week for the 20th time since the currency zone's debt crisis hit Greece in 2010 - would fail to come up with radical measures to back up weak countries.

Cyprus said Monday that it urgently needed European financial aid to boost its banks' capital, a step that would make it the fifth euro-zone economy to seek help from the region's bailout funds, The Wall Street Journal reported. Cyprus Finance Minister Vassos Shiarly said the country's need for an international bailout was "exceptionally urgent" in order for it to recapitalize its banks, and that the issue would need to be resolved by the end of the month.

Cyprus looks increasingly set to become the fourth euro-zone country to seek financial aid under Europe's temporary bailout fund, as early as this month, as it scrambles to protect its banking system from Greece's widening financial crisis that is threatening to engulf its tiny island neighbor, The Wall Street Journal reported.

The Bank of Cyprus on Monday urged the government to take immediate action to prevent the country from becoming the fourth euro-zone member to seek a bailout from the European Union, The Wall Street Journal reported. The call from the commercial bank—the island's largest financial institution—comes as discussions among Cypriot lawmakers on spending cuts appear increasingly strained. "There is no more time left," the bank said in a statement. "We are at a crucial crossroad where we will be judged by history.

Cyprus's government agreed on a series of austerity measures, seeking to avoid a bailout after a blast at its largest power station this month has led to rolling blackouts, compounding its existing economic problems, such as its close ties with Greece, The Wall Street Journal reported. The country was already wrestling with modest growth and possible contagion from Greece, which received a second euro-zone bailout Thursday, when a blast July 11 reduced Vasilikos, the island nation's largest power plant, to twisted metal and rubble.

Ratings agency Standard & Poor's cut Cyprus' government debt grade by one notch on Wednesday and warned it could issue the euro country another downgrade because of the financial system's exposure to debt-saddled Greece, the Associated Press reported. The agency said the Cypriot financial system's "significant" exposure to Greece represented a "ratings weakness." S&P credit analyst Benjamin Young said "the increasing likelihood that the Greek government will restructure its debt" heightened the risk that Cyprus would be impacted negatively.