Eurozone, IMF reach 10-bln-euro bailout deal for Cyprus

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After 10 hours of fraught negotiations, the eurozone and the International Monetary Fund (IMF) early Saturday morning agreed on a 10-billion-euro (about 13 billion U.S. dollars) bailout package for Cyprus.

The deal was announced by Eurogroup head Jeroen Dijsselbloem after a meeting of eurozone finance ministers, which is also attended by IMF chief Christine Lagarde.

"The Eurogroup was able to reach a political agreement with the Cypriot authorities on the cornerstones of this agreement," Dijsselbloem told reporters.

"The assistance is warranted to safeguard financial stability in Cyprus and the eurozone as a whole," he added.

According to the bailout deal, depositors in Cypriot banks will be hit with a one-off tax on their savings, marking the first bailout for any eurozone country in which depositors will directly lose money.

Holders of bank accounts with more than 100,000 euros will be taxed at 9.9 percent, and an additional 6.75 percent levy will be imposed on deposits below that level, raising an expected 5.8 billion euros for the Mediterranean island.

Cypriot Finance Minister Michalis Sarris described the deal as "not ideal," saying: "This decision should not be compared to the ideal, but to the very real possibility that much more money could have been lost in bankruptcy of the banking system or indeed of the country."

"I am not happy with this outcome in the sense that I wish I was not the minister that had to do this," said Sarris, who took office just two weeks ago.

"But I feel that the responsible course of action of a minister that takes an oath to protect the general welfare of the people and the stability of the system did not leave us with any other options," the finance minister said.

The Cypriot Parliament would adopt the taxes over the weekend and the money would be extracted from accounts before banks take up business Tuesday, as Monday is a public holiday, Sarris told reporters.

Dijsselbloem deemed the Cypriot bailout as "special."

"This is a special situation, with a very specific banking sector, with a very specific structure and size, which calls for this specific package," said Dijsselbloem, who is also the Dutch finance minister.

The EU Economic Affairs Commissioner Olli Rehn also hailed the rescue package, saying "Cyprus is of systemic relevance to the euro area," and "not to provide assistance to Cyprus would have posed a risk of undoing the progress that has been painstakingly made over the past year."