The Eurogroup has scheduled an extraordinary meeting for 16:00 London time in Brussels to discuss developments on Cyprus as the "by the end of March" deadline for the bailout agreement that so many authorities have expressed hopes on achieving moves nearer.

Eurozone Finance Ministers are expected to have a report on the agreement with the Troika (representatives from the European Commission, International Monetary Fund and European Central Bank) ready.

Eurogroup President Jeroen Dijsselbloem indicated this week that the financial assistance should be closer to €10bn than the €17bn originally discussed.

Experts from Renta 4 note that while Cyprus is "economically insignificant (0.2% of the Eurozone), its rescue will set the bar for future bailouts".

These analysts say that it will set a precedent because "for the first time in the Eurozone, a haircut is being considered for depositors, at least for balances above a certain amount. The other alternative being discussed is a tax on deposits of up to 5%". While they experts admit that forcing loses on depositors is not a done deal, they think the time has come wherein Europe may decide to embark on an "internal resolution of banking crisis".

In any case, Reuters reports that any deal today will not be definitive as officials have said that the best which can be hoped for is a "political agreement".

The excuse is that input from Russia on the proposal will be required before finalizing terms. Cypriot Finance Minister Michael Sarris is scheduled to travel to Moscow on Monday so as to discuss a deal with Russia.

Also of note, IMF chief Christine Lagarde is reportedly scheduled to join the Eurozone Finance Ministers at their afternoon meeting.

JM

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