European policymakers have reached an agreement to prevent Cyprus from experiencing economic meltdown.
The embattled island nation will receive a bailout worth some €10 billion ($13 billion) from its fellow member states in the eurozone after striking a deal just hours before the deadline of today (25 March) set by the European Central Bank.
Under the terms of the agreement, Laiki - the country's second-largest lender - will be immediately be split into a good bank and a bad bank, with the process of closing down the latter beginning straight away.
Although all deposits under €100,000 will be fully guaranteed, investors with amounts higher than this are set to face huge losses on their investment. The good part of Laiki will be folded into the Bank of Cyprus, it was confirmed.
Christine Lagarde, managing director of the International Monetary Fund, said this deal "provides a comprehensive and credible plan to deal with the current economic challenges in the country".
By Gary Cooper