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.

Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sportThe city’s fight for justice after Hillsborough is embodied in Steven Gerrard, who's poised to lead his club to a remarkable triumph
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
VIDEO
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
Environment
People are buying increasing numbers of plants such as lavender to aid the insects
environmentGardeners rally round the endangered bumblebee
Sport
Australia's Dylan Tombides competes for the ball with Adal Matar of Kuwait during the AFC U-22 Championship Group C match in January
sportDylan Tombides was diagnosed with testicular cancer in 2011
Arts & Entertainment
Customers browse through Vinyl Junkies record shop in Berwick Street, Soho, London
musicBest exclusives coming to an independent record shop near you this Record Store Day
News
Ida Beate Loken has been living at the foot of a mountain since May
newsNorwegian gives up home comforts for a cave
Extras
indybest10 best gardening gloves
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
Arts & Entertainment
Comedian Lenny Henry is calling for more regulation to support ethnic actors on TV
tvActor and comedian leads campaign against 'lack of diversity' in British television
News
Posted at the end of March, this tweeted photo was a week off the end of their Broadway shows
people
News
peopleStar to remain in hospital for up to 27 days to get over allergic reaction
Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
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
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit