Cyprus Girds For Run On Banks After Sealing Bailout

March 25, 2013 23:59

NICOSIA - The president of Cyprus assured his people a bailout deal he struck with the European Union was in their best interests and would end anxiety, but he also announced "very temporary" capital controls to stem a run on the island's banks.

Returning on Monday from fraught overnight negotiations in Brussels, the conservative leader said the 10-billion euro ($13 billion) rescue plan agreed there in the early hours of the morning was "painful" but essential to avoid economic meltdown.

He has agreed to close down the second-largest bank, Cyprus Popular, and inflict heavy losses on big depositors, many of them Russian, after Cyprus's outsize financial sector ran into trouble when its investments in neighboring Greece went sour.

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