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
Life and Style
techYahoo Japan launches service to delete your files and email your relatives when you die
Life and Style
Child's play: letting young people roam outdoors directly contradicts the current climate
lifeHow much independence should children have?
Arts and Entertainment
Tycoons' text: Warren Buffett and Bill Gates both cite John Brookes' 'Business Adventures' as their favourite book
booksFind out why America's richest men are reading John Brookes
News
i100
Arts and Entertainment
<p><strong>2008</strong></p>
<p>Troubled actor Robert Downey Jr cements his comeback from drug problems by bagging the lead role in Iron Man. Two further films follow</p>
filmRobert Downey Jr named Hollywood's highest paid actor for second year running
Life and Style
Dale Bolinger arranged to meet the girl via a fetish website
life
Property
Sign here, please: Magna Carta Island
propertyYours for a cool £4m
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

C++ Software Developer / Image Processing / 3D Visualisation

£45,000 to £55,000: IT Connections Ltd: C++ Software Developer / Image Process...

Java / J2EE Developer / Agile / Linux

£30,000 to £40,000: IT Connections Ltd: Java / J2EE Developer / Agile / Linux ...

Software Development Manager / Java / J2EE

£45,000 to £55,000: IT Connections Ltd: Software Development Manager / Java / ...

Digital Content Manager,Leicester

£24000 - £28000 per annum: Charter Selection: Leading Nationwide and important...

Day In a Page

Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

Meet the people who play with Lego for a living

They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

20 best days out for the summer holidays

From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
Open-air theatres: If all the world is a stage, then everyone gets in on the act

All the wood’s a stage

Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
Rand Paul is a Republican with an eye on the world

Rupert Cornwell: A Republican with an eye on the world

Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
Self-preservation society: Pickles are moving from the side of your plate to become the star dish

Self-preservation society

Pickles are moving from the side of your plate to become the star dish
Generation gap opens a career sinkhole

Britons live ever longer, but still society persists in glorifying youth

We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor