European Financial Industry: EU Finance Chiefs Struggle Over Deal on Handling Failing Banks - by Rebecca Christie, Jim Brunsden and Andrew Frye

European Union finance ministers struggled for consensus as they took up an Irish-drafted compromise proposal for assigning losses at failing banks, extending a deadlock that doomed talks last week.

The bloc’s 27 finance chiefs remained “quite far away” from agreement as they convened in Brussels at about 6 p.m. today, Sweden’s Anders Borg told reporters. Ireland’s Michael Noonan, chairing the meeting, held preliminary talks earlier to get a deal he says is key for keeping EU crisis-fighting on track.

“We can and even must reach an agreement,” French Finance Minister Pierre Moscovici said. It’s “indispensable” for France and Germany to “advance together to find a solution.”

Talks last week foundered on the question of which creditors face writedowns when banks fail. Some countries demanded more flexibility for national authorities, while others sought strict rules across all 27 EU nations. Ministers considered several ways to set thresholds for losses that would need to be assigned via strict formulas before national discretion would be allowed.

An updated plan, circulated by Ireland, a week away from the end of its six-month rotating EU presidency, would hand regulators different degrees of flexibility depending on how they plug gaps that arise when some creditors are exempted from writedowns.

Read more: EU Finance Chiefs Struggle Over Deal on Handling Failing Banks - SFGate

I.M.F. and E.U. Set Conditions for Cyprus Bailout - by James Kanter

The International Monetary Fund said on Wednesday it would contribute €1 billion, or about 10 percent of a bailout package for Cyprus in exchange for widespread reforms of the Cypriot economy.

“This is a challenging program that will require great efforts from the Cypriot population,” Christine Lagarde, the managing director of the I.M.F., said in a statement. 

The goal was to “stand by Cyprus and the Cypriot people in helping to restore financial stability, fiscal sustainability and growth to the country and its people,” Ms. Lagarde said in a second statement she issued jointly with Olli Rehn, the European Union commissioner for economic and monetary affairs. 

The statements follow agreement on Tuesday between Cyprus and the so-called troika of international organizations — the European Central Bank, the European Commission and the I.M.F. — that painstakingly negotiated the €10 billion, or $13 billion, bailout and the terms of the deal.

Read more: I.M.F. and E.U. Set Conditions for Cyprus Bailout - NYTimes.com