Sunday Times 2
Cyprus on verge of financial death
View(s):NICOSIA, March 23, (AFP) – Cypriot politicians were facing increasing pressure to rethink their rejection of a levy on bank deposits, as a deadline to secure an EU bailout loomed closer Saturday.
They approved the first three of eight measures put forward by the government in their bid to meet the terms of the EU bailout in a late-night session late on Friday.
A Cyprus bank employee sits on the ground as protesters blocked the streets leading to the parliament in Nicosia. AFP
But with the the clock ticking down to a crunch Sunday meeting with eurozone finance ministers, MPs still have to debate more contentious issues, such as a tax of up to 15 percent on bank deposits of 100,000 euros ($129,000) and more.
The government needs to seal the package by Monday or face being denied European Central Bank emergency funds, a blow that would devastate the island’s banks and its economy.
On Tuesday, MPs flatly rejected proposals for a 9.9 percent tax on bank deposits over 100,000 euros, with a 6.75 percent levy on deposits of 20,000-100,000 euros.
The original proposal had also proposed to tax savings below 20,000, but the parliament’s financial committee had dropped it before the vote.
The levy would have hurt many ordinary Cypriots as well as many Russians, including wealthy tycoons. They hold between a third and half of all Cypriot deposits and are believed to have more than $30 billion in private and corporate cash in the island’s banks.
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