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.

Life and Style
life
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
News
Joan Rivers has reportedly been hospitalised after she stopped breathing during surgery
people81-year-old 'stopped breathing' during vocal chord surgery
Life and Style
Chen Mao recovers in BK Hospital, Seoul
health
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
One in six drivers cannot identify a single one of the main components found under the bonnet of an average car
motoringOne in six drivers can't carry out basic under-bonnet checks
Environment
Fungi pose the biggest threat globally and in the UK, where they threaten the country’s wheat and potato harvests
environmentCrop pests are 'grave threat to global food security'
News
i100
Voices
Pupils educated at schools like Eton (pictured) are far more likely to succeed in politics and the judiciary, the report found
voices
Arts and Entertainment
Simon Cowell is less than impressed with the Strictly/X Factor scheduling clash
tvSimon Cowell blasts BBC for breaking 'gentlemen's agreement' in scheduling war
Arts and Entertainment
Shady character: Jon Hamm as sports agent JB Bernstein in Million Dollar Arm
filmReview: Jon Hamm finally finds the right role on the big screen in Million Dollar Arm
News
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
people
News
Brad Pitt and Angelina Jolie reportedly married in secret on Saturday
peopleSpokesperson for couple confirms they tied the knot on Saturday after almost a decade together
Sport
footballAnd Liverpool are happy despite drawing European champions
News
i100
Arts and Entertainment
tv
News
i100
Arts and Entertainment
Diana from the Great British Bake Off 2014
tvProducers confirm contestant left because of illness
Arts and Entertainment
Lisa Kudrow, Courtney Cox and Jennifer Anniston reunite for a mini Friends sketch on Jimmy Kimmel Live
tv
Life and Style
fashion

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

SQL Report Analyst (SSRS, CA, SQL 2012)

£30000 - £38500 Per Annum + 25 days holiday, pension, subsidised restaurant: C...

Primary supply teachers needed in Bury St Edmunds

£21000 - £35000 per annum: Randstad Education Cambridge: Supply teachers requi...

English Teacher

£120 - £162 per day: Randstad Education Hull: Secondary English Teacher - requ...

Science Teacher

£120 - £162 per day: Randstad Education Hull: Calling all science teachers! Ra...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone