Political leaders in Cyprus are working on an alternative proposal to stave off bankruptcy after parliament overwhelmingly rejected an international bailout plan.
Nicos Anastasiades, president of Cyprus, has met party leaders and central bank officials on Wednesday to work out how they can raise billions of euros in funds to stave off bankruptcy.
The president also met representatives of his country's potential creditors, from the International Monetary Fund, European Central Bank and European Commission. However, no statement was issued on the result of those talks.
The talks come a day after MPs rejected terms set by the EU and IMF to raise money in return for the $13bn bailout by seizing up to 10 percent of people's bank savings, with zero votes in favour, 36 against and 19 abstentions.
Meanwhile, with Russian banks and individuals heavily invested in the island, Cyprus' finance minister has asked Moscow for help to avert a financial meltdown.
Government spokesman Christos Stylianides said that a meeting had begun at the central bank to discuss a "Plan B" on how the administration could raise funds and reduce the 5.8 billion euros ($7.5bn) that must be found domestically.
Banks to remain shut
Banks in Cyprus will not open until at least Tuesday as the government officials tried to find a new plan to resolve the crisis.
Aliki Stylianou, the country's central bank's spokeswoman, said the banks would remain shut for another two days, Thursday and Friday. Monday is a national bank holiday in Cyprus.
The cash-strapped banks have been closed since Saturday, when Cyprus said it would raid bank deposits to help fund its international bailout package, to avoid a bank run.
Michael Sarris, Cyprus' finance minister, said that he had reached no deal on financing with his Russian counterpart, Anton Siluanov, but talks were continuing.
Cypriot officials disclosed that the country's energy minister was also in Moscow, ostensibly for a tourism exhibition.
Cyprus has found big gas reserves in its waters near Israel but has yet to develop them.
"We'll now continue our discussion to find the solution by which we hope we will be getting some support," Sarris said after initial talks with Siluanov.
Access to credit
Austria's finance minister made clear the European Central Bank (ECB) could soon pull the plug on Cypriot banks after the island's parliament bailout rebuttal.
Not a single politician voted for the proposed levy that would have taken up to 10 percent from larger accounts, many of which are held by foreigners, while sparing smaller savers with fewer than 20,000 euros in the bank.
It was the first time a national legislature had rejected the conditions for EU assistance, after three years in which politicians in Greece, Ireland, Portugal, Spain and Italy all accepted biting austerity measures to secure aid.
The ECB is keeping the Cypriot banking sector going by allowing the local central bank to extend emergency support.
It said it would end that if there was no bailout deal and it was clear the banks had no hope of becoming solvent again.
For now, the ECB says it will continue allowing banks access to credit. But analysts note that if there is no bailout deal within days, the ECB will have to end it.