Europe, Euro Zone | featured news

Cyprus is struggling to comply with the conditions that Europe is demanding of it before it gets a desperately needed 10 billion euro loan.

Banks on the tax haven of Cyprus opened Thursday for the first time in 12 days amid the island's continuing financial crisis. Strict limits on the amount of money that could be withdrawn have been imposed – people will be able to withdraw 300 euros ($383) a day and no checks will be cashed – amid fears of a run on the banks.

Cyprus has imposed limits on money transfers and hired extra security guards to prepare for the reopening of its banks, which have been shut for almost two weeks to avoid a run during the country's financial drama.

With time running out until Cyprus’s devastated banks must reopen their doors to the public, Cypriot and European officials are scrambling to put in place a set of measures that would allow jittery depositors access to their savings while preventing many billions of euros from fleeing the country.

Antreas Artemis, the chairman of Bank of Cyprus, contended that he and the bank's board were not consulted in bailout negotiations that would impose large losses on depositors.

The Central Bank of Cyprus says the country's finance minister has decided to order all banks in the country to remain shut until Thursday.

Cyprus secured a package of rescue loans in tense, last-ditch negotiations early Monday, two EU diplomats said, saving the country from a banking system collapse and bankruptcy.

As Cypriot politicians raced to find a new financial rescue plan ahead of a Monday deadline, tensions built in the streets of the capital. Residents withdrew what money they could from ATMs amid concern the banks could collapse.

As it tries to play Russia off against Europe to salvage its economy, Cyprus has embarked on a high-stakes poker game that could see almost everyone lose.

The European Central Bank is prepared to cut off funding to Cyprus and let the Mediterranean island succumb to financial meltdown if it has to, confident it has unlimited firepower to protect the rest of the euro zone.