News Summary: Cyprus seeks concessions from labor
HOSTILE NEGOTIATIONS: The president of Cyprus is trying to convince trade unions to rally behind tough austerity measures that the government wants to negotiate with potential creditors in return for a multibillion euro bailout loan to prop up the country's ailing banks and economy. Dimitris Christofias is asking union leaders to "act patriotically" to head off the kind of social unrest now gripping Greece and Spain.
BANKS REELING: Cyprus has asked the European Commission, the European Central Bank and the International Monetary Fund for aid to support a banking sector reeling from its exposure to Greece. In return, the so-called 'troika' wants the government to slash spending by roughly $1.29 billion.
BREAKING POINT: Moody's, which downgraded Cyprus deeper in to junk territory this week, said the recapitalization needs of Cypriot banks could exceed $10.31 billion. The agency said that would push public debt to a massive 140 percent of gross domestic product — possibly too much to bear for a small country with bleak growth prospects over the next three to five years.
