Cyprus considers taxing a quarter of big deposits at largest bank as president prepares to fly to Brussels to discuss eurozone bailout

Finance minister says 'significat progress' is being made with proposals expected as early as this evening

Cyprus MPs are looking at seizing up to a quarter of the value of big deposits at its largest bank to meet requirements for a bailout from the European Union

Finance Minister Michalis Sarris said "significant progress" had been made, and that new legislation raising funds could be completed and submitted to Parliament as early as this evening, although the timing was not certain.

He confirmed discussions were centred on a possible levy of around 25 per cent on holdings of over €100,000 at Bank of Cyprus, and expressed hope that a package could be ready by the end of the day for approval by parliament.

A snub from Russia yesterday left Cyprus little choice but to reconsider a plan to tax people’s deposits to secure desperately needed funding from Europe and the IMF and avert a crisis that could engulf the eurozone.

Last night, the Cypriot Parliament backed the implementation of capital controls, becoming the first eurozone country to enforce such drastic measures while MPs also voted for the set-up of an emergency solidarity fund in a last-minute effort to save their country from bankruptcy and an exit from the eurozone. Authorities postponed the voting of a controversial European-backed bank levy, which resurfaced after having been shelved for prompting widespread public fury.

President Nikos Anastasiades and other politicians will fly to Brussels tomorrow to hold talks with senior European officials ahead of an extraordinary Eurogroup meeting.

"Tomorrow 6pm #eurogroup on #cyprus," read a tweet from Jeroen Dijsselbloem, who is Dutch minister of finance and president of the Eurogroup - the 17 eurozone national finance ministers.

Averof Neophytou, deputy leader of the ruling Disy party, speaking in parliament, said politicians owed an apology to the Cypriot people. “We are all responsible for letting our land reach the edge of the cliff,” he said.

Meanwhile, British officials are flying to Nicosia to offer advice to the government on ways of saving country’s local banks from collapse.

Mr Anastasiades’ administration has the difficult task of not only coming up with a plan to scrape together €5.8bn (£4.9bn), but convincing parliament and the troika of the International Monetary Fund, the ECB and the European Union to accept it.

Neither is guaranteed: on Tuesday the legislature threw out a plan to tax everyone with money in Cypriot banks, while the signals from Germany about measures to nationalise pensions have not been encouraging. Hopes that Russia might provide more loans were dashed yesterday when Michael Sarris, the Finance Minister, returned from Moscow empty-handed.

The proposals to be put forward to parliament are reported to include restructuring the ailing Cyprus Popular Bank – known as Laiki. People with more than €100,000 there could lose up to 30 per cent of their deposit.

Mr Sarris said tonight that taxing people with more than €100,000 in other banks was again under discussion. “I think that is clearly on the table; that is something that needs to be discussed to see whether a levy on deposits of some sort ... would make a contribution to finalising the package,” Mr Sarris said.

EU officials in Brussels said they were studying proposals put forward by Cyprus and were moving into “top gear” to help design “a viable  alternative solution which can be acceptable to all eurozone member states”.

The tone from Berlin, however, was less encouraging, with Chancellor Angela Merkel reported to be wary of a proposal to create a “solidarity fund” of state assets. If the plan does not make it past the troika, Cyprus will not qualify for the €10bn bailout agreed in Brussels last Saturday.

The ECB would also pull emergency funding and the banks would collapse, taking the Cypriot economy with them and leading to its eventual exit from the single currency.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
On set of the Secret Cinema's Back to the Future event
filmBut why were Back to the Future screenings cancelled?
News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
Lewis Hamilton walks back to the pit lane with his Mercedes burning in the background
Formula 1
Arts and Entertainment
The new characters were announced yesterday at San Diego Comic Con
comic-con 2014
Sport
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
football
Arts and Entertainment
No Devotion's Geoff Rickly and Stuart Richardson
musicReview: No Devotion, O2 Academy Islington, London
News
i100
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
News
i100
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Commercial Litigation

Highly Attractive Salary: Austen Lloyd: CITY - SENIOR COMMERCIAL LITIGATION SO...

BI Developer - Sheffield - £35,000 ~ £40,000 DOE

£35000 - £40000 per annum + competitive: Progressive Recruitment: My client is...

Employment Solicitor

Highly Competitive Salary: Austen Lloyd: MANCHESTER - Senior Employment Solici...

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

Day In a Page

Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride