Cyprus moves towards bailout deal

It will be an interesting weekend for Cyprus. Reuters reports the latest developments:

Cyprus is expected to make a dramatic U-turn on Saturday to avert the imminent threat of financial meltdown, having signaled it is willing to tax big savers in its stricken banks to clinch a bailout from the European Union.

The island's partners in the 17-nation euro zone scheduled a meeting for Sunday in Brussels, in a strong sign they believe a solution is near.

As hundreds of demonstrators faced off with riot police outside parliament late into Friday night, lawmakers inside voted to nationalize pension funds, pool state assets for a bond issue and peel good assets from bad in stricken banks.

Officials said a deal was imminent to raise 5.8 billion euros demanded by the EU in return for a 10 billion euro ($13.00 billion) lifeline, including some kind of levy on bank deposits, which could be voted on as soon as Saturday.

Investors apparently see a likelihood of an agreement on the bailout. Markets mostly rose on Friday, leaving the S&P 500 down just 0.2 percent for the week. The STOXX Europe 600 was down 1.1 percent for the week.

A report from Ifo on Friday showing that its business climate index for Germany fell to 106.7 in March from 107.4 in February seemed to have made little impact on markets. It was the first decline in five months.