Europe's troubles worsen as Cyprus seeks bailout

The sovereign debt in the eurozone escalated yesterday, with Cyprus saying it would seek aid from the eurozone's bailout funds.

''The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure in the Greek economy,'' the government said in a statement.

The island nation had its sovereign debt downgraded to junk status, earlier yesterday by Fitch. Russia last year extended a three-year, $3.13-billion loan to the country.

Cyprus could become the next country to receive bailouts like Greece, Portugal, and Ireland.

In neighbouring Greece, finance minister, Vassilis Rapanos, tendered his resignation yesterday. He was hospitalised after complaining of intense abdominal pain, nausea, sweating, and dizziness on Friday.

Greece's new prime minister, Antonis Samaras, would also miss a crucial summit meeting of EU leaders on Thursday and Friday in Brussels. Samaras left the hospital yesterday after undergoing  eye surgery. Greece would be represented by a ministerial delegation at the meeting, where EU officials would debate relaxing bailout terms for Greece.