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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 — As the European Central Bank threatened to shut off crucial financing for banks in Cyprus without a rapid accord on an international bailout, members of Parliament put off a vote on Thursday on yet another revamped formula. The vote was rescheduled for Friday. | NICOSIA, Cyprus — As the European Central Bank threatened to shut off crucial financing for banks in Cyprus without a rapid accord on an international bailout, members of Parliament put off a vote on Thursday on yet another revamped formula. The vote was rescheduled for Friday. |
| The mood in the streets turned increasingly dark. Police officers clashed with protesters as about 200 gathered outside Parliament. | The mood in the streets turned increasingly dark. Police officers clashed with protesters as about 200 gathered outside Parliament. |
| Those involved in the scuffles included employees of Cyprus Popular Bank, the country’s second-largest bank, who had turned out amid rumors that it could be shut down within hours. The central bank issued a denial but warned that Cyprus Popular Bank risked an immediate default if Parliament did not pass the bailout measure. | Those involved in the scuffles included employees of Cyprus Popular Bank, the country’s second-largest bank, who had turned out amid rumors that it could be shut down within hours. The central bank issued a denial but warned that Cyprus Popular Bank risked an immediate default if Parliament did not pass the bailout measure. |
| After the government said banks would remain closed until Tuesday to allow time for a bailout deal to be reached, residents flocked to cash machines in growing numbers. Lines of three dozen people or more, withdrawing as much money as possible, were common sights. | After the government said banks would remain closed until Tuesday to allow time for a bailout deal to be reached, residents flocked to cash machines in growing numbers. Lines of three dozen people or more, withdrawing as much money as possible, were common sights. |
| With anger growing, President Nicos Anastasiades presented Parliament on Thursday with a plan that scrapped a controversial tax on bank deposits. | |
| Experts warned, however, that the deposit-tax plan might need to be revisited unless the government found other means to reach the goal of 5.8 billion euros, or $7.5 billion, needed to satisfy international negotiators. | |
| The central bank said the new package included “consolidation measures” to enable Cyprus Popular Bank, also known as Laiki Bank, to continue operating. | |
| As the country’s most troubled lender, it would be reorganized by placing underperforming loans and questionable assets into a so-called bad bank and transferring healthy assets to the Bank of Cyprus, the nation’s largest financial institution. By effectively shutting down one of the banks needing support, the government would lower the large tab for supporting the banking system. | |
| But the central bank warned that if Parliament failed to pass the measure, “Laiki will default immediately, causing major consequences to its employees and its clients.” | But the central bank warned that if Parliament failed to pass the measure, “Laiki will default immediately, causing major consequences to its employees and its clients.” |
| Lawmakers will also vote on restrictions on taking cash out of banks and out of the country, known as capital controls, when the banks reopen. The bill would limit cash withdrawals, prohibit or restrict check cashing and bar “premature” account closings and any other transaction that authorities deemed unwarranted. | Lawmakers will also vote on restrictions on taking cash out of banks and out of the country, known as capital controls, when the banks reopen. The bill would limit cash withdrawals, prohibit or restrict check cashing and bar “premature” account closings and any other transaction that authorities deemed unwarranted. |
| The central bank said on Thursday that Cyprus had until Monday to reach an agreement with the European Union and the International Monetary Fund if the government wanted its banks to continue to receive the low-interest loans essential to keeping them afloat. | The central bank said on Thursday that Cyprus had until Monday to reach an agreement with the European Union and the International Monetary Fund if the government wanted its banks to continue to receive the low-interest loans essential to keeping them afloat. |
| After a hastily convened evening meeting to assess the situation, the group of 17 finance ministers whose countries use the euro issued a statement declaring themselves “conditionally satisfied” with most of the new proposal, which the so-called troika of lenders — the International Monetary Fund, the European Central Bank and the European Commission — is to assess on Friday after the Parliament vote. | After a hastily convened evening meeting to assess the situation, the group of 17 finance ministers whose countries use the euro issued a statement declaring themselves “conditionally satisfied” with most of the new proposal, which the so-called troika of lenders — the International Monetary Fund, the European Central Bank and the European Commission — is to assess on Friday after the Parliament vote. |
| “We now need to move into top gear and work intensively with the Cypriot government and our troika partners to design a viable alternative solution that can be acceptable to all euro-area member states,” Simon O’Connor, a spokesman for the European commissioner for economic and monetary affairs, Olli Rehn, said in a statement. | “We now need to move into top gear and work intensively with the Cypriot government and our troika partners to design a viable alternative solution that can be acceptable to all euro-area member states,” Simon O’Connor, a spokesman for the European commissioner for economic and monetary affairs, Olli Rehn, said in a statement. |
| The plan sent to Parliament on Thursday would nationalize pension funds from state-run companies and conduct an emergency bond sale to help raise the 5.8 billion euros Cyprus needs to secure a 10 billion euro bailout. Gone was any reference to a deposit tax, which Parliament had roundly rejected in a vote two nights earlier. | The plan sent to Parliament on Thursday would nationalize pension funds from state-run companies and conduct an emergency bond sale to help raise the 5.8 billion euros Cyprus needs to secure a 10 billion euro bailout. Gone was any reference to a deposit tax, which Parliament had roundly rejected in a vote two nights earlier. |
| At branches of Laiki Bank and the Bank of Cyprus in the Cypriot capital, Nicosia, where lines had virtually disappeared over the last three days, there was an air of exasperation, anger and anxiety on Thursday as people hoped that money would still be in the machines by the time it was their turn to make a withdrawal. Only one of two cash machines at each bank branch was working. | At branches of Laiki Bank and the Bank of Cyprus in the Cypriot capital, Nicosia, where lines had virtually disappeared over the last three days, there was an air of exasperation, anger and anxiety on Thursday as people hoped that money would still be in the machines 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. | “Time is up — we want our cash,” said Maria Melitou, an accountant. |
| “Our friends in Europe brought us to this point,” she added. “We expected more.” | “Our friends in Europe brought us to this point,” she added. “We expected more.” |
| Irena Margilou, the 13th person in an 18-person line at a Laiki Bank cash machine, said bitterly, “We don’t know what the future holds.” | Irena Margilou, the 13th person in an 18-person line at a Laiki Bank cash machine, said bitterly, “We don’t know what the future holds.” |
| Ms. Margilou criticized what she said was German insistence that the Cypriot government skim money from people’s bank accounts to secure the bailout. “It’s like you’re telling us to just leave our money in our mattress,” she said. “What is happening to European solidarity?” | Ms. Margilou criticized what she said was German insistence that the Cypriot government skim money from people’s bank accounts to secure the 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 Limassol, a coastal city about an hour’s drive southwest of Nicosia that is crowded with Russian residents, lines of 25 to 30 people snaked in front of every A.T.M. that still had cash. Many of the wealthiest citizens of Russia, which is not in the euro currency union, have bank accounts in Cyprus — one reason that euro zone finance ministers have taken such a hard line. | In Limassol, a coastal city about an hour’s drive southwest of Nicosia that is crowded with Russian residents, lines of 25 to 30 people snaked in front of every A.T.M. that still had cash. Many of the wealthiest citizens of Russia, which is not in the euro currency union, have bank accounts in Cyprus — one reason that euro zone finance ministers have taken such a hard line. |
| In Moscow, President Vladimir V. Putin discussed the Cyprus situation on Thursday in a one-on-one meeting with the European Commission president, José Manuel Barroso, who was in Russia for an annual meeting of senior officials. | In Moscow, President Vladimir V. Putin discussed the Cyprus situation on Thursday in a one-on-one meeting with the European Commission president, José Manuel Barroso, who was in Russia for an annual meeting of senior officials. |
| A delegation of Cypriot officials led by the finance minister, Michalis Sarris, also remained in Moscow to press their case for additional aid, but there were no reports of progress, and the officials stayed out of sight. | A delegation of Cypriot officials led by the finance minister, Michalis Sarris, also remained in Moscow to press their case for additional aid, but there were no reports of progress, and the officials stayed out of sight. |
| For months, Cyprus had been discussing the possibility of changing the terms of a loan of 2.5 billion euros that Russia provided in late 2011, to lower the interest rate and defer the repayment deadline. | For months, Cyprus had been discussing the possibility of changing the terms of a loan of 2.5 billion euros that Russia provided in late 2011, to lower the interest rate and defer the repayment deadline. |
| The Russian prime minister, Dmitri A. Medvedev, said in a meeting with European journalists that a number of Russian state-owned companies had bank accounts in Cyprus, and he expressed annoyance that those accounts had been frozen, presumably interfering with some business operations. | The Russian prime minister, Dmitri A. Medvedev, said in a meeting with European journalists that a number of Russian state-owned companies had bank accounts in Cyprus, and he expressed annoyance that those accounts had been frozen, presumably interfering with some business operations. |
| Russian citizens and other entities are estimated to have 23 billion euros or more in Cyprus banks. But the Russian government is also concerned about an even larger amount of money that typically flows through Cyprus, where many companies that operate in Russia maintain offshore affiliates. | Russian citizens and other entities are estimated to have 23 billion euros or more in Cyprus banks. But the Russian government is also concerned about an even larger amount of money that typically flows through Cyprus, where many companies that operate in Russia maintain offshore affiliates. |
| The authorities have ordered Cypriot banks to keep A.T.M.’s filled with cash as long as the banks themselves are closed. But that has been of little help to the thousands of international companies that 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 A.T.M.’s filled with cash as long as the banks themselves are closed. But that has been of little help to the thousands of international companies that do banking in Cyprus, which cannot transfer money in and out of those accounts to conduct business. |
| Jeroen Dijsselbloem, chairman of the euro zone finance ministers, said on 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. | Jeroen Dijsselbloem, chairman of the euro zone finance ministers, said on 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, and that this made it inevitable that Cyprus would have to impose a one-time tax on “investors” rather than on “savers.” | He added that Russian loans to Cyprus would only swell the country’s already unmanageable debt, and that this made it inevitable that Cyprus would have to impose a one-time tax on “investors” rather than on “savers.” |
Reporting was contributed by Melissa Eddy in Berlin, James Kanter in Brussels, David M. Herszenhorn in Moscow and Andreas Riris in Nicosia. | Reporting was contributed by Melissa Eddy in Berlin, James Kanter in Brussels, David M. Herszenhorn in Moscow and Andreas Riris in Nicosia. |
| This article has been revised to reflect the following correction: | This article has been revised to reflect the following correction: |
| Correction: March 21, 2013 | Correction: March 21, 2013 |
An earlier version of this article misspelled the given name of the Cypriot finance minister. He is Michalis Sarris, not Michaelis. It also misstated the location of Limassol. It is southwest of Nicosia, not southeast. | An earlier version of this article misspelled the given name of the Cypriot finance minister. He is Michalis Sarris, not Michaelis. It also misstated the location of Limassol. It is southwest of Nicosia, not southeast. |