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European Parliaments Next To Approve Cyprus Deal

RENEE MONTAGNE, HOST:

It's MORNING EDITION, from NPR News. I'm Renee Montagne.

DAVID GREENE, HOST:

And I'm David Greene.

The tiny Mediterranean island of Cyprus was on the brink of bankruptcy. But at the last minute, European finance ministers approved a multibillion-dollar bailout for the country. The deal will keep the island's banking system from collapsing, but the country is far from out of the woods.

NPR's Soraya Sarhaddi Nelson begins our coverage from Berlin.

SORAYA SARHADDI NELSON, BYLINE: The 10-billion-euro deal - which amounts to $13 billion - came after tense negotiations during which the Cypriot president threatened to resign.

Dutch Finance Minister Jeroen Dijsselbloem.

(SOUNDBITE OF SPEECH)

NELSON: They include the International Monetary Fund and the European Central Bank, which threatened to cut off aid to Cypriot banks today unless a deal was reached.

Under the new rescue plan, Cyprus must cut the size of its banking sector, tackle corruption and overhaul its budget. The deal also requires the island nation's second-largest bank to close and its larger accounts to be frozen.

Cypriot authorities will tap into those accounts to help raise the 5.8 billion euros they have to pay toward the bailout. But Cypriots with less than 100,000 euros in the bank will no longer face a planned levy that scuttled an earlier bailout plan last week.

(SOUNDBITE OF N-TV BROADCAST)

NELSON: Speaking on German N-TV, German Finance Minister Wolfgang Schaeuble says he's satisfied with the terms.

Germany, which is a key financer of eurozone bailouts, has long been at odds with Cyprus over conditions for its rescue plan. The new deal still must be approved by several European parliaments.

Soraya Sarhaddi Nelson, NPR News, Berlin. Transcript provided by NPR, Copyright NPR.

Special correspondent Soraya Sarhaddi Nelson is based in Berlin. Her reports can be heard on NPR's award-winning programs, including Morning Edition and All Things Considered, and read at NPR.org. From 2012 until 2018 Nelson was NPR's bureau chief in Berlin. She won the ICFJ 2017 Excellence in International Reporting Award for her work in Central and Eastern Europe, North Africa, the Middle East and Afghanistan.
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