BRUSSELS -- Russia isn't going to come to Cyprus's rescue with new loans and any bailout of the Mediterranean island will have to involve some kind of levy on depositors, the man leading the eurozone's efforts to reach a deal said on Thursday.
Cyprus has faced the prospect of bankruptcy since Tuesday when its parliament voted unanimously against a levy on bank deposits to raise almost €6 billion ($7.5 billion) demanded by the eurozone, in addition to a €10 billion rescue.
Jeroen Dijsselbloem, who chairs meetings of eurozone finance ministers, said the deal offered early on Saturday wasn't dead and that there were few alternatives for Cyprus.
"It's probably inevitable there will be some kind of levy in the final package that we will agree upon," Dijsselbloem told the European Parliament.
"The levy I can strongly defend, because it is a direct way to ask a contribution of the deposits of the banking sector in Cyprus, which is inevitable if you want to a build a package which doesn't bring more loans and more debt to Cyprus," he said.
Warning that the problems in Cyprus pose a systemic risk to the eurozone, he said he hoped Cyprus could agree a fairer balance between depositors in their contribution to helping the country out of its difficulties.
"The vast amount of deposits in Cyprus are not really savers, they are investors," Dijsselbloem said.
At the center of the furor is a proposal that puts the levy on both savers with under €100,000 on deposit as well as those over that level. Since there is in theory insurance on deposits up to €100,000 , the plan would hit small savers.
Dijsselbloem said he and his eurozone peers had urged Nicosia to avoid hitting accounts below €100,000 and to instead increase the levy on big accounts.
"The Eurogroup thinks it's very important that we should have a fair burden share, and that means a larger contribution from large depositors than, of course, from small depositors."
Dijsselbloem said Cyprus should not hold out hope that Moscow will come to the country's rescue if it cannot seal a deal with the Eurogroup, saying an extension of a Russian 2.5 billion loan was under discussion.
"Any other options, to go further, another loan or an investment in the banks, the Russians let us know that they are not willing to do that. "Of course, the Cypriot government is now talking to the Russian government whether more can be done, I don't know the outcome of that yet.
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Tax on Cyprus Depositors 'Inevitable,' Euro Chief Says
What it does: Eni (E) is an Italian energy company that combines all three major businesses of the oil and gas industry -- exploration and production, transport and storage, and refining and marketing -- under one corporate umbrella.
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What it does: Telefonica (TEF) is a Spanish company providing telephone, Internet, and video services to customers in Europe and Latin America.
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What it does: Seagate (STX) is a major manufacturer of hard drives for computers. It moved its headquarters to Ireland in 2010, but it still has extensive operations in the U.S. and elsewhere around the world.
Why it's a bargain: The rise of tablets and smartphones has hurt the PC industry, which is a big buyer of hard drives. Moreover, as newer technologies like solid-state drives and flash memory become even more cost-effective, investors fear that Seagate's traditional disk drives will become obsolete. Yet Seagate has taken steps to stay relevant with its own solid state drives, and with a price-to-earnings ratio of just 4, even anticipated declines in net income don't make the stock look expensive.
What it does: AstraZeneca (AZN) is a U.K.-based pharmaceutical company. Its best-selling drugs have included cholesterol drug Crestor and its Nexium acid-reflux drug.
Why it's a bargain: AstraZeneca has been hit hard by the loss of patent protection on some of its blockbuster drugs, especially the antipsychotic Seroquel, sales of which dropped by $3 billion last year due to generic competition. But there are other drugs in its pipeline that could eventually replace the profits generated by those past blockbusters, including diabetes treatment Bydureon. At this point, AstraZeneca's P/E of 9 reflects patent-loss pessimism and leaves room for upside if the company's stable of drugs in development pans out well.