Cyprus Parliament Likely to Reject Terms of Bailout And Tax on Bank Holdings

by Colonel on March 19, 2013

“Cyprus’s Parliament is likely to reject an international bailout package that involves taxing ordinary depositors to pay part of the bill, President Nicos Anastasiades said Tuesday. …

Should the measure fail in Parliament, Mr. Anastasiades and his E.U. partners would have to return to the negotiating table. Analysts have also raised the possibility of bank runs and a halt in liquidity to Cypriot banks from the European Central Bank if the measure did not pass.

The original terms of the bailout called for a one-time tax of 6.75 percent on deposits of less than €100,000, and a 9.9 percent tax on holdings of more than €100,000. …

Under a new plan put forward by Mr. Anastasiades early Tuesday, depositors with less than €20,000 in the bank would be exempt, but the taxes would remain in place for accounts above that amount.

” — Liz Alderman, Copyright 2013 The New York Times Company

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