Cyprus negotiations paying off

Fierce negotiations to resurrect a deal for the EU and the IMF to bail out Cyprus appeared to be bearing fruit early on Monday, President Nicos Anastasiades indicated on Twitter. "Efforts have culminated," read a translation from the Greek, with EU sources subsequently stating that a "preliminary agreement" was in place to hit Bank of Cyprus with a whopping "haircut" on deposits of more than 100,000 euros. Waiting Eurogroup finance ministers were set to go over the new plan with a view to approval. During more than 10 hours of talks with bosses from the ECB, IMF and the EU, Anastasiades had fought for the survival of the island's No. 1 lender, the Bank of Cyprus. The deal hammered out would see the bank, with one third of all holdings, survive. But this would come at a massive price for investors, which one senior EU source said could be as high as 40 percent. Another senior EU source said there would be no levy -- a major U-turn from last week's collapsed deal to clobber all savers on the island. But Cyprus's second bank, Laiki, would be wound up as part of the agreement, he added. Smaller account-holders will be covered by the EU's deposit guarantee legislation, which runs to the 100,000-euro threshold, while those above that level face a hefty haircut. The negotiations were aimed at pulling together some seven billion euros, mainly from the Cypriot banking sector, to unlock a 10-billion-euro ($13-billion) loans package from eurozone partners and the International Monetary Fund. A major sticking-point throughout the talks was a European Central Bank demand for the Bank of Cyprus to pay a nine-billion-euro bill due to Frankfurt.