Cyprus, Euro Zone Bailout | featured news

Cyprus' lawmakers approved on Tuesday a multi-billion bailout agreement with international creditors aimed at preventing the crisis-hit country from going bankrupt.

Germany's lower house of parliament voted overwhelmingly on Thursday to grant Cyprus a 10 billion euro bailout that is designed to avert bankruptcy for the tiny Mediterranean island nation and keep it in the euro zone.

Some key data about bond purchases by Bank of Cyprus - now the focus of a controversial EU-IMF bailout - is missing, investigators have found. The gaps were found in computer records studied by a financial consultancy, Alvarez and Marsal, Cypriot media say.

The International Monetary Fund will contribute 1 billion euros ($1.29 billion) over three years to the 10 billion euro bailout for Cyprus, IMF Managing Director Christine Lagarde said in a statement on Wednesday.

Michalis Sarris resigned after announcing the final terms of a bailout for the nation’s banking system that imposed heavy losses on bank depositors in return for aid.

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 Strict limits on the amount of money that could be withdrawn have been imposed – people will be able to withdraw 300 euros ($383) a day and no checks will be cashed – amid fears of a run on the banks.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.

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.

Homeowners have told of how sales of their properties are on hold and businesses have called for clarity amid banking uncertainty in Cyprus. The country is braced for an emergency session of its parliament, and a planned vote, regarding a 10bn euro ($13bn; £9bn) financial rescue.