Cyprus faces final chance to save slipping economy

Cypriot President Nicos Anastasiades, seeking a last-minute reprieve from financial meltdown at talks in Brussels on Sunday, has a "very difficult task" ahead of him if he is to save the island's economy, a government spokesman said.

With Cyprus facing a Monday deadline to avert a collapse of its banking system and potential exit from the euro, late night talks in Nicosia to seal a bailout from the EU and International Monetary Fund broke up without result.

Anastasiades then headed to Brussels in a private jet sent by the European Commission to hold talks with EU, European Central Bank and IMF leaders ahead of a crunch meeting of Euro zone finance ministers at 6 pm.

The President and his team have a "very difficult task to accomplish to save the Cypriot economy and avert a disorderly default if there is no final agreement on a loan accord," the spokesman said.

Underlining the gravity of Cyprus' position, the EU's economic affairs chief Olli Rehn said there were now "only hard choices left" for the latest casualty of the Euro zone crisis.

Finance Minister Pierre Moscovici put it more bluntly: "To all those who say that we are strangling an entire people ... Cyprus is a casino economy that was on the brink of bankruptcy," he told Canal Plus television.

After negotiations ended in the early hours of Sunday morning in Nicosia, the government issuing a statement saying talks were at "a very delicate phase" and deadlines were very tight.

The government's tone jarred with earlier expressions of cautious optimism during days of intense negotiations between Cypriot leaders and officials from the island's "troika" of international lenders, the EU, IMF and European Central Bank.

Cyprus' overgrown banking sector has been crippled by exposure to crisis-hit Greece, and the EU says the east Mediterranean island must raise ^5.8 billion on its own before it can receive a ^10-billion bailout.