BRUSSELS — After failing for a week to find a solution at home to a crisis that could force it into bankruptcy, Cypriot politicians were turning to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout.
Politicians are under pressure to come up with a solution quickly, with the European Central Bank threatening to stop providing emergency funding to Cyprus’ banks after today if there is no agreement on a way to raise 5.8 billion euros ($7.5 billion) needed to get a 10 billion euro rescue loan package from the International Monetary Fund and the other European countries that use the single currency.
If Cyprus fails to secure a bailout, some of its ailing banks could collapse within days and rapidly drag down the government and possibly force it out of the euro, a huge threat to the stability of the currency used by more than 300 million people in 17 EU nations.
Despite the danger, Europe’s biggest economy maintained a hard line. German Finance Minister Wolfgang Schaeuble said “if possible we want to avoid seeing Cyprus sliding into insolvency.”
But, he said Sunday in a newspaper interview that Cyprus cannot expect compromise over the threat of bankruptcy and possibility it could leave the eurozone.