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The tiny Mediterranean island of Cyprus was on the brink of bankruptcy. But at the last minute, European finance ministers approved a multibillion-dollar bailout for the country. The deal will keep the island's banking system from collapsing, but the country is far from out of the woods.
NPR's Soraya Sarhaddi Nelson begins our coverage from Berlin.
SORAYA SARHADDI NELSON, BYLINE: The 10 billion-euro deal - which amounts to $13 billion - came after tense negotiations during which the Cypriot president threatened to resign.
Dutch Finance Minister Jeroen Dijsselbloem.
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JEROEN DIJSSELBLOEM: As you are all aware, it's been a particularly difficult road to get here. However, this agreement is supported by all member states, as well as the three institutions.
NELSON: They include the International Monetary Fund and the European Central Bank, which threatened to cut off aid to Cypriot banks today unless a deal was reached.
Under the new rescue plan, Cyprus must cut the size of its banking sector, tackle corruption and overhaul its budget. The deal also requires the island nation's second-largest bank to close and its larger accounts to be frozen.
Cypriot authorities will tap into those accounts to help raise the 5.8 billion euros they have to pay toward the bailout. But Cypriots with less than 100,000 euros in the bank will no longer face a planned levy that scuttled an earlier bailout plan last week.
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WOLFGANG SCHAEUBLE: (Foreign language spoken)
NELSON: Speaking on German N-TV, German Finance Minister Wolfgang Schaeuble says he's satisfied with the terms.
Germany, which is a key financer of Eurozone bailouts, has long been at odds with Cyprus over conditions for its rescue plan. The new deal still must be approved by several European parliaments.
Soraya Sarhaddi Nelson, NPR News, Berlin. Transcript provided by NPR, Copyright NPR.