NICOSIA, Cyprus — Cypriot President Nicos Anastasiades said Saturday that a levy on bank depositors was a painful decision he had to make in order to obtain financial aid from his country’s European partners and the International Monetary Fund, adding that without the loans the island’s economy would have gone bankrupt.
Anastasiades, elected three weeks ago with a pledge to negotiate a swift bailout, said refusal to agree to terms would have led to the collapse of the island’s two largest banks.
The president said he would deliver a state address Sunday, when Cyprus’s parliament is scheduled to meet in an emergency session to decide whether to approve the measure announced early Saturday.
The eastern Mediterranean nation becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial aid.
But in a radical departure from previous aid packages — and one that triggered fury across the island — euro-zone finance ministers forced Cyprus’s savers to forfeit up to 10 percent of their deposits to raise almost 6 billion euros, or $7.8 billion.
“On Tuesday . . . we would either choose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis,” Anastasiades said in a written statement.
Had Cyprus chosen the “catastrophic scenario,” he said, from Tuesday on, one of the two distressed banks would have ceased to operate, since the European Central Bank had decided to terminate provision of emergency liquidity assistance.
“The second bank would suspend its work, and neither could avoid collapse,” he said.
Although he did not name the banks, he was referring to the Cyprus Popular Bank, which has been receiving the emergency liquidity assistance for months, and the Bank of Cyprus, the island’s largest bank.
If the banks collapsed, Anastasiades said, the state would be obliged to compensate depositors with a bill potentially reaching $39 billion, which it would be unable to pay.
Thousands of Cypriots converged on automated teller machines Saturday to withdraw cash, leaving many inoperative by midafternoon. Cooperative credit societies, normally open for business on Saturdays, were forced to close to prevent a run on deposits.