- European leaders weigh on whether to keep Cyprus in the region
- George Osborne reveals UK Budget 2013
- Spain to change recovery forecasts

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European equities recovered Wednesday after three days in the red as the region's leaders debated whether to keep Cyprus in the Eurozone.

Policy makers in the bloc are weighing how far to push Cyprus after the country's lawmakers rejected a proposal for a levy on bank deposits. It threw into limbo a rescue package designed to keep the country in the euro.

The bank levy was meant to enable Cyprus to obtain €5.75bn and was a condition of receiving a €10bn European bailout.

Luxembourg Finance Minister Luc Frieden has asked European leaders to meet to plan a new bailout.

"This is not a good result - neither for Cyprus, nor for the Eurozone, and we have to look together for alternatives to the negotiated package," Frieden told Bloomberg.

"What matters now is to undertake all necessary measures to ensure the stability of the Eurozone."

Cyprus has now turned to Russia to seek aid after its decision to reject the bank levy put the country in jeopardy and at risk of default.

Cypriot Finance Minister Michael Sarris said discussions with Russian counterpart Anton Siluanov were productive but that no decision has been reached.

He said that talks on Wednesday were "very honest" and promised that "we'll now continue our discussion to find the solution by which we hope we will be getting some support".

UK Budget 2013 unveiled

Chancellor George Osborne said the forecast for economic growth was cut by half to 0.6% as he revealed the UK Budget 2013 on Wednesday.

The Office for Budget Responsibility (OBR) had predicted growth of 1.2% at the time of the Autumn Statement in December.

In his fourth Budget, Osborne said his target to debt-as-percentage of GDP will now not fall until 2017.

Specifically, he said public sector net debt is anticipated to be 75.9% of GDP this year, 79.2% next year, 82.6% the year after, and 85.1% in 2015-16. It will fall to 84.8% by 2017-18.

"Despite the recession in the Eurozone, the OBR central forecast today is that we avoid a second quarter of negative growth here in the UK," Osborne said.

"While less than we would like, our growth this year and next year is forecast by the IMF [International Monetary Fund] to be higher than France and Germany.

Spain to alter recovery forecast

Spain's Prime Minister Mariano Rajoy said the forecast for the country's recovery is set to change.

However, he said it was unclear whether it would change for "better or worse".

"I think we are going to change our forecasts, but the most important thing is that we are implementing measures to increase employment [...] We're setting the foundation for the recovery," Rajoy insisted.

He reiterated that Spain will see the first signs of improvement at the end of this year.

Royal Imtech says financial restructuring on track

Deutsche Bank shares fell as Germany's largest bank said it raised its litigation reserves 33% to €2.4bn.

Royal Imtech, the Dutch provider of 2012 London Olympic stadium infrastructure, advanced after saying its financial restructuring was on track as lenders agreed to continue the current financing arrangements.

Elementis Plc soared after JPMorgan Chase & Co. upgraded the chemical company to 'overweight', equivalent to a 'buy' rating.

Dufry climbed as UBS raised its recommendation for the operator of duty-free shops to 'buy' from 'neutral'.

Other asset classes mixed

The euro/dollar dropped 0.04% to the 1.0264 dollar level.

Front month Brent crude future rose by 0.399 dollars to the 107.880 dollar mark on the ICE.

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