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A LEADING GERMAN MEP, who is a key ally of chancellor Angela Merkel, has said that the current situation in Cyprus puts the entire credibility of the eurozone at risk.

The chairman of the European Parliament’s Foreign Affairs Committee, Elmar Brok, admitted that the current situation in Cyprus is “a mess” in an interview with TheJournal.ie in Dublin today.

But Brok, a member of Merkel’s Christian Democrats party, said that the reason for this was that the Cypriot government wanted to protect large bank deposits from Russia, a stance which had been “underestimated” by EU and IMF negotiators.

“I think the Cypriot situation is that they do not want tax the Russian deposits and [they want to] find it somewhere else including pension funds, which is a problem,” he said.

Brok acknowledged acknowledged that the situation is “a mess”, saying: “That’s true but it came to this situation because the Cypriot government refused to keep [deposits] under €100,000 out [of the agreement].”

One of the longest-serving MEPS in Brussels, Brok said that he could see a situation where Cyprus would exit the euro but said: “I believe we should help them. In my opinion, every country is systemic relevant… It would give a wrong expression if the European Union is not able to protect the smallest part [of it].”

Meanwhile, the head of the Eurogroup, Jeroen Dijsselbloe, has said that eurozone finance ministers will assemble in Brussels from 5pm GMT tomorrow in a bid to nail down a bailout for Cyprus and get the island’s banks back open next week.

“Eurogroup tomorrow 6pm will be in Brussels,” the Dutch finance minister, who chairs the group’s meetings, said on Twitter this afternoon.

More: Cyprus president prepares for Brussels as parties debate 25pc deposit tax