Race to finish Cyprus bailout plan

Politicians in Cyprus were racing on Saturday to complete an alternative plan raising funds necessary for the country to qualify for an international bailout, with a potential bankruptcy just three days away.

Finance minister Michalis Sarris said "significant progress" had been made and that new legislation raising funds could be completed and debated in Parliament as early as Saturday evening, although the timing was not certain.

Cyprus has been told it must raise 5.8 billion euro (£4.9 billion) in order to secure 10 billion euro (£8.5 billion) in rescue loans from other European countries that use the single currency, and from the International Monetary Fund.

The country's lawmakers soundly rejected an unpopular initial plan that would have seized up to 10% of people's bank accounts and is now seeking a way to raise the money.

But the idea of a deposit grab returned to the fore after Cyprus' talks with long-time ally Russia for help broke down.

According to a finance ministry official, who spoke on condition of anonymity because he is not authorised to speak about the negotiations, new laws may not be needed if Cyprus' prospective creditors opt for a "voluntary contribution" from large depositors of as much as a quarter of their savings at the country's largest lender, Bank of Cyprus.

Another option being considered is a tax of some 10% percent on all bank deposits above 100,000 euro (£85,000).

The European Central Bank (ECB) has said it will stop providing emergency funding to Cyprus' banks after Monday if no new plan is in place. Without ECB's support, Cypriot banks would collapse on Tuesday, pushing the country toward bankruptcy and a potential exit from the 17-nation eurozone.

Banks have been shut all week while the plan is worked out and are not due to reopen until next Tuesday. Cash has been available through ATMs but many run out quickly, and those machines for the troubled Laiki Bank are only dispensing 260 euro (£221) a day.

Thousands of angry bank employees afraid of losing their jobs marched through the centre of Nicosia to the Finance Ministry and Parliament, some with placards around their necks reading: "No to the bankruptcy of Cyprus." They marched up to the front of the ministry, calling on President Nicos Anastasiades to resign and chanting, "Anastasiades, you took our homes away from us."