Eurozone and IMF agree 10bn-euro Cyprus bailout deal

Eurozone finance ministers have agreed a 10bn-euro (£8.7bn) bailout package for Cyprus to save the country from bankruptcy.

The deal was reached after talks in Brussels between the ministers and the International Monetary Fund (IMF).

In return, Cyprus is being asked to trim its deficit, shrink its banking sector and increase taxes.

Cyprus' banks were badly exposed to Greece, which has itself been the recipient of two huge bailouts.

"The Eurogroup was able to reach a political agreement with the Cypriot authorities on the cornerstones of this agreement," Eurogroup head Jeroen Dijsselbloem said after almost 10 hours of the negotiations.

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

IMF chief Christine Lagarde, who took part in the talks, said earlier: "We don't want a Band-Aid. We want something that lasts, that is durable and sustainable."