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Cyprus leaders to head to Brussels for bailout talks: CNA

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(Globalpost/GlobalPost)

Cyprus President Nicos Anastasiades and party leaders will travel to Brussels on Saturday for crunch talks with the EU on measures aimed at staving off bankruptcy for the island, state media said.

The delegation would depart at lunchtime and return to Cyprus late on Saturday or on Sunday, a day ahead of a deadline to adopt the measures aimed at raising 5.8 billion euros ($7.5 billion) in order to secure a 10-billion-euro bailout, the official CNA news agency reported.

The Cyprus parliament finally gave its approval late Friday to the first three of eight measures hammered out by the government in a desperate bid to secure the bailout from the EU and IMF by Monday's deadline.

MPs approved a solidarity fund to be set up through the nationalisation of pensions and capital controls to prevent a run on the island's banks when they are finally due to open on Tuesday after being closed for more than a week.

They also passed a restructuring plan drawn up by the Central Bank of Cyprus that will separate "good" debts from "bad" in the troubled banks, particularly in second largest lender Laiki Bank.

The most contentious of the measures that has yet to be put to parliament is a scheme to impose a levy on bank deposits -- an unpopular measure that deputies have already rejected this week in another form.

But with the deadline looming and the option of securing funding from elsewhere including from ally Russia exhausted, they have been forced to revisit it as an option to raise the 5.8 billion euros.

Media reports on Saturday said the most likely scenario was a tax of 20-25 percent on deposits of more than 100,000 euros at the island's biggest lender, the Bank of Cyprus.

The government needs to seal the package by Monday or face being denied European Central Bank emergency funding in a move that would collapse the island's banks and devour its economy.

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http://www.globalpost.com/dispatch/news/afp/130323/cyprus-leaders-head-brussels-bailout-talks-cna