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| Mood Darkens in Cyprus as Deadline Is Set for Bailout | Mood Darkens in Cyprus as Deadline Is Set for Bailout |
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| NICOSIA, Cyprus — Cyprus faces a hardened deadline of Monday to secure a new agreement on an urgently needed bailout, after the European Central Bank said Thursday it would shut off access to crucial low-cost bank funding if an accord were not reached by then. | NICOSIA, Cyprus — Cyprus faces a hardened deadline of Monday to secure a new agreement on an urgently needed bailout, after the European Central Bank said Thursday it would shut off access to crucial low-cost bank funding if an accord were not reached by then. |
| Meanwhile, the mood turned sour in Cypriot cities, where people flocked to cash machines Thursday to withdraw as much money as possible after the government declared that banks would remain closed until next Tuesday to give officials time to renegotiate the bailout deal. | Meanwhile, the mood turned sour in Cypriot cities, where people flocked to cash machines Thursday to withdraw as much money as possible after the government declared that banks would remain closed until next Tuesday to give officials time to renegotiate the bailout deal. |
| With anger growing, Cyprus’s president, Nicos Anastasiades, was set to propose a revised plan later Thursday to scrap a controversial tax on bank deposits. But if the government does not raise enough money through other means to satisfy creditors, that plan would need to be revised. | With anger growing, Cyprus’s president, Nicos Anastasiades, was set to propose a revised plan later Thursday to scrap a controversial tax on bank deposits. But if the government does not raise enough money through other means to satisfy creditors, that plan would need to be revised. |
| And in a rare public mea culpa, the head of the euro zone finance ministers sought to defuse tensions by taking the blame for the proposal to levy a one-time tax on small accountholders as a condition of the bailout. The proposal was roundly rejected by the Cypriot Parliament on Tuesday. | And in a rare public mea culpa, the head of the euro zone finance ministers sought to defuse tensions by taking the blame for the proposal to levy a one-time tax on small accountholders as a condition of the bailout. The proposal was roundly rejected by the Cypriot Parliament on Tuesday. |
| “As the Eurogroup president, I will take responsibility,” Jeroen Dijsselbloem told a hearing at the European Parliament. He acknowledged that he should have “communicated more right from the start” on why the tax should not be seen as a threat to savings in other European countries. | “As the Eurogroup president, I will take responsibility,” Jeroen Dijsselbloem told a hearing at the European Parliament. He acknowledged that he should have “communicated more right from the start” on why the tax should not be seen as a threat to savings in other European countries. |
| The European Central Bank gave Cyprus until Monday to reach an agreement with the European Union and the International Monetary Fund if it wanted to continue to receive the low-interest loans that are essential to keeping its banks afloat. | The European Central Bank gave Cyprus until Monday to reach an agreement with the European Union and the International Monetary Fund if it wanted to continue to receive the low-interest loans that are essential to keeping its banks afloat. |
| From that point onward, the E.C.B. said it would only consider a fresh influx of emergency funding, as requested by Cyprus, “if an E.U./I.M.F. program is in place that would ensure the solvency of the concerned banks.” | From that point onward, the E.C.B. said it would only consider a fresh influx of emergency funding, as requested by Cyprus, “if an E.U./I.M.F. program is in place that would ensure the solvency of the concerned banks.” |
| The government on Thursday was planning to propose nationalizing pension funds from state-run companies and conducting an emergency bond sale to help raise the €5.8 billion the indebted country needs to secure the bailout. | The government on Thursday was planning to propose nationalizing pension funds from state-run companies and conducting an emergency bond sale to help raise the €5.8 billion the indebted country needs to secure the bailout. |
| The proposals were meant to sharply reduce the amount of money that would be raised by the tax on bank deposits, which was a condition of the original bailout deal negotiated with Cyprus’s three international lenders — the E.C.B., the I.M.F. and the European Commission, known collectively as the troika. | The proposals were meant to sharply reduce the amount of money that would be raised by the tax on bank deposits, which was a condition of the original bailout deal negotiated with Cyprus’s three international lenders — the E.C.B., the I.M.F. and the European Commission, known collectively as the troika. |
| Representatives of the troika were in Nicosia on Thursday but were not certain to sign off on Cyprus’s latest plan. | Representatives of the troika were in Nicosia on Thursday but were not certain to sign off on Cyprus’s latest plan. |
| Cypriot banks, which have been closed since Saturday, will remain closed through a national holiday Monday, the government announced late Wednesday, hoping to avoid a bank run while the bailout is being renegotiated. | Cypriot banks, which have been closed since Saturday, will remain closed through a national holiday Monday, the government announced late Wednesday, hoping to avoid a bank run while the bailout is being renegotiated. |
| Riot police clashed with some protesters in front of the parliament building early in the evening, as about 200 demonstrators gathered outside. Police also scuffled with employees of Cyprus Popular Bank who had turned out amid rumors the country’s second-largest bank could be shut down as early as Thursday night. | |
| The central bank said the new package to be considered by Parliament would include “consolidation measures” for the bank, also known as Laiki Bank, to continue operating. If Parliament failed to pass the measure, “Laiki will default immediately, causing major consequences to its employees and its clients,” the central bank said. | |
| At bank branches in the Cypriot capital, Nicosia, where lines had virtually disappeared over the last three days, there was an air of exasperation, anger and anxiety Thursday as people hoped that funds would still be on hand by the time it was their turn to make a withdrawal. Only one of two cash machines at each bank branch was working. | |
| “Time is up — we want our cash,” said Maria Melitou, an accountant. “Our friends in Europe brought us to this point. We expected more.” | |
| Irena Margilou, 32, the 13th person in an 18-person line at Laiki Bank’s cash machine, spoke in an embittered voice. “We don’t know what the future holds,” she said. | Irena Margilou, 32, the 13th person in an 18-person line at Laiki Bank’s cash machine, spoke in an embittered voice. “We don’t know what the future holds,” she said. |
| She questioned what she said was German insistence that the Cypriot government skim money from people’s bank accounts to secure a €10 billion, or $13 billion, bailout. “It’s like you’re telling us to just leave our money in our mattress,” she said. “What is happening to European solidarity?” | She questioned what she said was German insistence that the Cypriot government skim money from people’s bank accounts to secure a €10 billion, or $13 billion, bailout. “It’s like you’re telling us to just leave our money in our mattress,” she said. “What is happening to European solidarity?” |
| In the city of Limassol, which is crowded with Russian residents, lines of 25 to 30 people snaked in front of every automated teller machine that still had cash. Many of Russia’s wealthiest citizens hold bank accounts in Cyprus. | In the city of Limassol, which is crowded with Russian residents, lines of 25 to 30 people snaked in front of every automated teller machine that still had cash. Many of Russia’s wealthiest citizens hold bank accounts in Cyprus. |
| Cypriot banks have frozen all accounts in a financial crisis here that risks tipping the country into default and sowing turmoil across the euro zone. | Cypriot banks have frozen all accounts in a financial crisis here that risks tipping the country into default and sowing turmoil across the euro zone. |
| The authorities have ordered Cypriot banks to keep automated bank machines filled with cash as long as their doors remain shut. But that has been of little help to the thousands of international companies who do banking in Cyprus, which cannot transfer money in and out of those accounts to conduct business. | The authorities have ordered Cypriot banks to keep automated bank machines filled with cash as long as their doors remain shut. But that has been of little help to the thousands of international companies who do banking in Cyprus, which cannot transfer money in and out of those accounts to conduct business. |
| The fallback was being cobbled together as Cyprus’s finance minister pressed his case in Moscow on Wednesday in hopes of securing additional aid from Russia. The talks ended inconclusively. | The fallback was being cobbled together as Cyprus’s finance minister pressed his case in Moscow on Wednesday in hopes of securing additional aid from Russia. The talks ended inconclusively. |
| Mr. Dijsselbloem, the Eurogroup chairman, said Thursday that there were few signs that Russia would come forward with an alternative plan or loans enabling European lenders and the Cypriots to reduce their contribution to a bailout package. | Mr. Dijsselbloem, the Eurogroup chairman, said Thursday that there were few signs that Russia would come forward with an alternative plan or loans enabling European lenders and the Cypriots to reduce their contribution to a bailout package. |
| He added that Russian loans to Cyprus would only swell the country’s already unmanageable debt. That, turn, made it inevitable that Cyprus would have to impose a one-time levy on “investors” rather than on “savers.” | He added that Russian loans to Cyprus would only swell the country’s already unmanageable debt. That, turn, made it inevitable that Cyprus would have to impose a one-time levy on “investors” rather than on “savers.” |
| Melissa Eddy in Berlin and James Kanter in Brussels contributed reporting. | Melissa Eddy in Berlin and James Kanter in Brussels contributed reporting. |