EU finance experts seek ways to get Cyprus bailout deal

EU officials worked on a rescue package for Cyprus on Friday, hoping to get approval from the IMF and euro zone finance ministers later in the day.

The package is expected to contain a mixture of tax increases, one-off revenue raising measures, plans for privatisations and the overhaul of Cyprus’s banking sector to ensure that funding for the bailout is sustainable.

It is possible Russia will help finance the programme by extending a 2.5 billion euro loan already made to Cyprus and potentially reducing the interest rate, officials have said.

Cyprus, with gross domestic product of barely 0.2 percent of the bloc’s overall output, applied for financial aid last June after its banks suffered huge losses following a European Union- approved writedown of Greek debt.

Progress was slow under a previous Cypriot government but without help Cyprus would slide into default, threatening progress made last year in convincing investors that the euro bloc can manage its debt problems.