Video: Eurogroup defends Cyprus bail-out "The Eurogroup considers that in principle financial assistance to Cyprus is warranted to safeguard financial stability in Cyprus and the euro area as a whole," said Jeroen Dijsselbloem, president of the Eurogroup meetings of the 17-nation eurozone's finance ministers, after almost 10 hours of negotiations. In return for the rescue loans, Cyprus will trim its deficit, shrink its troubled banking sector, raise taxes and privatise state assets. People with less than €100,000 in their Cypriot bank accounts will have to pay a one-time tax of 6.75 per cent, those owning more money will lose 9.9 per cent. While the bail-out for the east Mediterranean island nation is many times smaller than Greece's or Ireland's, it was still considered crucial to the eurozone's future because a default even by a small country could roil financial markets and undermine investor confidence in other nations. "A default of Cyprus and banks would have direct stability implications for Greece and indirect consequences for the wider euro area," said Joerg Asmussen, a member of European Central Bank's executive board. This could lead to renewed financial instability, requiring further mitigating polices and to a further loss of jobs and growth in the eurozone.