Cypriot parliament rejects tax on deposits

Athens, March 20 (IANS/RIA Novosti) The parliament of Cyprus Tuesday overwhelmingly rejected a bill aimed at charging steep levies on bank deposits, jeopardising the country’s chances of securing a desperately needed international bailout.

The bill envisioned a levy of 6.75 percent on deposits of less than 100,000 euros ($128,950) and of 9.9 percent on larger deposits.
Thirty-six deputies in the 56-seat parliament voted against the bill, while 19 abstained. None voted in support.
The proposal to dip into bank savings to boost the government’s coffers provoked intense anger among the Cypriot population and foreign account-holders based abroad. But its failure now leaves Cyprus closer to effective bankruptcy.
Consultations will now be held with the president on finding another solution to the crisis that some fear could send the nation of 1.1 million tumbling out of the eurozone.
International creditors in eurozone countries and the International Monetary Fund said their 10 billion euro ($13 billion) rescue package for debt-laden Cyprus was contingent on the one-off deposit levy, which stood to yield some 5.8 billion euros ($7.5 billion) in revenues for the Cyprus budget.
Those plans incited an angry response Monday from Russian President Vladimir Putin, who called the move “unfair, unprofessional and dangerous”.
Russian Prime Minister Dmitry Medvedev compared the measure to “a confiscation of someone else’s money”.
–IANS/RIA Novosti