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In Nicosia, the country's biggest bank urged politicians to make haste and cut a deal with their EU partners as parliament considered proposals to nationalise pension funds, pool state assets and split the country's second-largest bank in a desperate effort to satisfy those exasperated European allies.
The governor of the Central Bank, Panicos Demetriades, warned political leaders the country would face a disorderly bankruptcy on Tuesday unless they approved the bills, an official present at the talks said.
“The next few hours will determine the future of the country,” government spokesman Christos Stylianides said before the parliamentary debate. “We must all assume our share of the responsibility.”
Even if the measures are approved, there was no confirmation they would raise the euro 5.8 billion demanded by the EU in return for a euro 10-billion ($12.9-billion) bailout to avoid a default.
The biggest local bank, the Bank of Cyprus, urged the government to go back and make a deal from the European Union, under which larger deposits over euro 100,000, would be taxed. It was preferable, it said, to a collapse of the system and a return to the Cypriot pound which would wipe out assets.
“There must be no further delay,” the bank said.
Cypriot insistence on taxing even small savers — in hopes of limiting damage to an offshore banking sector heavily dependent on larger Russian depositors — saw a bailout deal that had been agreed with the EU a week ago rejected by parliament on Tuesday.
Several hundred people rallied peacefully outside parliament on Friday, holding banners saying 'No to the victimisation of banks'. “Our so-called friends and partners sold us out,” said Marios Panayides, 65.
“They have completely abandoned us on the edge of an abyss.”
Elsewhere, depositors, who have been besieging bank cash machines all week, queued again to withdraw what they could.
The clock was running down to a Monday deadline set by the European Central Bank for a deal to be in struck before it cuts funds to Cyprus's stricken banks, potentially pushing it out of Europe's single currency.
“The talks have ended as far as the Russian side is concerned,” Russian Finance Minister Anton Siluanov said after two days of crisis talks with his Cypriot counterpart, Michael Sarris.
Russians have billions of euros at stake in Cyprus's outsized and now crippled banking sector, a factor in the EU's unprecedented demand that bigger depositors take a hit in the interests of keeping Cyprus afloat.
But Siluanov said Russian investors were not interested in Cypriot gas and that the talks had ended without result. New Bills submitted to the Cypriot parliament included a “solidarity fund” to bundle state assets, including future gas revenues and nationalised semi-state pension funds, as the basis for an emergency bond issue.
