Cyprus has secured a package of rescue loans after a series of lengthy negotiations today, saving the country from a banking system collapse and bankruptcy, according to two EU diplomats.
The country needs a 10 billion euro bailout in order to recapitalise its banks and keep the government afloat.
There were reports yesterday that Cypriot president Nicos Anastasiades threatened to resign because of the amount of sticking points during negotiations, which were subject to several delay.
Cyprus is now set to close down one of its two biggest banks and restructure the second one as part of an international bailout.
Bank depositors of up to 100,000 euros will ultimately not suffer any losses but bigger depositors will contribute to recapitalising the bank that is to be restructured - Bank of Cyprus.
Shareholders, bondholders and those who held deposits above 100,000 euros in Laiki bank, which will be closed down, will cover the cost of the resolution, eurozone ministers and the International Monetary Fund decided.
Depositors with over 100,000 euros in the Bank of Cyprus will see their money above that threshold frozen until it is clear how much of it will be needed to recapitalise the bank so that it can reach a capital ratio of 9 percent.