Cypriot President Nicos Anastasiades embarked on last-minute crisis talks with international lenders on Sunday in an attempt to save the Mediterranean island from financial meltdown. With Cyprus facing a Monday deadline to avert a collapse of its banking system and potential exit from the euro, late night negotiations in Nicosia to seal a bailout from the EU and International Monetary Fund broke up without result.
Anastasiades then headed to Brussels in a private jet sent by the European Commission to hold talks with EU, European Central Bank and IMF leaders ahead of a crunch meeting of euro zone finance ministers at 6 pm (1700 GMT).
The president and his team have a "very difficult task to accomplish to save the Cypriot economy and avert a disorderly default if there is no final agreement on a loan accord," the spokesman said.
Underlining the gravity of Cyprus'''' position, the EU''''s economic affairs chief Olli Rehn said there were now "only hard choices left" for the latest casualty of the euro zone crisis.
French Finance Minister Pierre Moscovici put it more bluntly: "To all those who say that we are strangling an entire people ... Cyprus is a casino economy that was on the brink of bankruptcy," he told Canal Plus television.
Fears have been expressed that the problems of Cyprus could cause a wider financial market sell-off, but the island''''s small size - it accounts for just 0.2 percent of the eurozone''''s economic output - has led other experts to forecast that contagion will continue to be limited.
ANXIOUS MOOD
In the capital, Nicosia, the mood was anxious.
"I haven''''t felt so uncertain about the future since I was 13 and Cyprus was invaded," said Dora Giorgali, 53, a nursery teacher who lost her job two years ago when the school she worked at closed down.
"I have two children studying abroad and I tell them not to return to Cyprus. Imagine a mother saying that," she said as she sipped an ice cold coffee in a central Nicosia square. "I think a solution will be found tonight but it won''''t be in the best interests of our country."
After negotiations ended in the early hours of Sunday morning in Nicosia, the government issuing a statement saying talks with international lenders were at "a very delicate phase" and deadlines were very tight.
The government''''s tone jarred with earlier expressions of cautious optimism during days of intense negotiations between Cypriot leaders and officials from the island''''s "troika" of international lenders, the EU, IMF and European Central Bank.
Cyprus'''' overgrown banking sector has been crippled by exposure to crisis-hit Greece, and the EU says the east Mediterranean island must raise 5.8 billion euros on its own before it can receive a 10 billion euro bailout.
Without a deal by the end of Monday, the ECB says it will cut off emergency funds to Cypriot banks, spelling certain collapse and potentially pushing the country out of the euro.