Cyprus’ government says negotiations on a 10 billion euro bailout deal are at a "very delicate stage."
A government statement said President Nicos Anastasiades would travel to Brussels on March 24 for further talks with euro-zone and International Monetary Fund officials.
The European Central Bank says it will stop providing emergency funding to Cypriot banks if no new plan for resolving the crisis is in place by March 25.
Such a move could force Cyprus to declare bankruptcy and leave the euro-zone, potentially triggering financial chaos across Europe and globally.
Negotiations have been focusing on a possible one-time tax of 20 percent or more on deposits of more than 100,000 euros at at the Mediterranean island’s largest lender, the Bank of Cyprus. Reports say a lower levy could be applied to deposits at other banks.
The trio of international lenders - the European Union, the European Central Bank and International Monetary Fund - are demanding that Cyprus raise nearly six billion euros to secure the 10 billion rescue package.
The European Union’s Economic and Monetary Affairs Commissioner Olli Rehn said it was is “essential” that an agreement be reached by the night of March 24.
“Intensive work and contacts will continue in the coming hours," Rehn said. "It is essential that an agreement is reached by the Eurogroup on Sunday evening in Brussels on a financial assistance program for Cyprus. This agreement then needs to be swiftly implemented by Cyprus and its euro-zone partners."
Rehn added that Cypriots are likely to face a “very difficult” time in the near future because of the crisis.
"Unfortunately, the events of recent days have led to a situation where there are no longer any optimal solutions available," he said. "There are only hard choices left. Support from Europe can help to minimize the economic damage and protect the most vulnerable from the effects of the financial crisis in Cyprus. It is clear that the near future for Cyprus will be very difficult."
Lawmakers on March 19 rejected imposing a levy of up to 10 percent on savers - but the issue reemerged after Cypriot officials failed to win financial support from the Russian government.
A levy on deposits would impact wealthy Russians and others, who are said to have deposited billions of euros in Cyprus’ banking sector to take advantage of the favorable tax amd investment terms the island used to offer.
Based on reports from Reuters, AP and AFP