Cyprus races to avoid financial collapse

NEW YORK — Lawmakers in Cyprus worked on Saturday to finish a plan to meet the conditions of a European rescue by a Monday deadline and avert a meltdown of the island nation’s financial system.

Finance Minister Michalis Sarris reportedly said “significant progress” had been made, and a new measure raising funds could be done and submitted to Parliament as soon as Saturday evening.

The efforts come with the clock ticking toward a potential bankruptcy for Cyprus. The European Central Bank has said it would halt funding to its banks after Monday if no plan has been implemented.

Cyprus must come up with 5.8 billion euros ($7.5 billion) to qualify for 10 billion euros in bailout loans from other euro-zone nations, and the IMF.

Officials with the International Monetary Fund, ECB and European Commission, otherwise known as the troika, met with Sarris in the Finance Ministry throughout Saturday morning, according to reports.

As hundreds of protesters confronted riot police outside parliament Friday night, lawmakers in Nicosia approved measures including a restructuring of troubled banks, curbs on financial transactions in emergencies and the creation of a “solidarity fund” to serve as a means of raising funds from investments and contributions.

But the discussions still under way involve coming up with new legislative fixes, and reportedly include a bill that could involve taxing bank deposits.

Party officials said the discussions were focused on taxing deposits of more than 100,000 euros, leaving out smaller savings accounts, Reuters reported.

The nation’s counterparts in the 17-nation euro area set a meeting for Sunday in Brussels, signaling a resolution could be at hand.