Cyprus government proposes change to let small savers escape tax on bank deposits as parliament looks ready to reject bailout package in key vote and risk default
People with less than €20,000 in the bank would not have to forfeit any savings under new proposals
The Cypriot government has put forward a new proposal which would allow small savers to escape a tax on their bank accounts, but there remained fears that parliament would later today reject the harsh bailout deal aimed at saving the Mediterranean island from bankruptcy.
Under the new proposals, people with less than €20,000 (£17,000) in the bank would not have to forfeit any of their savings – a change from the the controversial agreement reached in Brussels on Saturday, which stipulated that all deposits would be taxed. Those with between €20,000 and €100,000 would lose 6.75 per cent of their savings, and people with over €100,000 would face a 9.9 per cent tax.
President Nicos Anastasiades was forced to amend the deal reached with the International Monetary Fund (IMF), the European Central Bank (ECB) and eurozone finance ministers after outcry in Cyprus, with people rushing to cash machines to try and get their hands on their money before the measures came into force.
With indications that parliament too would oppose the idea, a vote on the deal has twice been postponed since Sunday. It is now scheduled to begin at 1600 GMT, as the President scrambles to cobble together support for his new plan.
Cyprus' central bank chief conceded, however, that the new proposals did not raise the €5.8bn required by the European Union, and it was unclear how any shortfall would be made up. The troika of the IMF, the ECB and the EU have pledged €10bn in assistance, but only if the Cypriots come up with close to €6bn themselves.
In a statement last night, eurozone finance ministers said they were willing to tweak the deal to lessen the burden on small savers. The total contribution from Cyprus, however, must remain the same. “The statement is quite clear on that point,” an EU spokesperson said.
Even if the troika can be convinced, it remains to be seen if parliament will agree. “The feeling I'm having is that the house is going to reject the bill,” Mr Anastasiades said earlier today. Asked why, he said: “Because they feel and they think that it is unjust and it's against the interests of Cyprus at large.”
- 1 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 5 This crazy skiing video will leave you feeling queasy
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Warriors in ancient Iraq suffered Post-Traumatic Stress Disorder more than 3,000 years ago, say researchers
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
British Muslim school children suffering a backlash of abuse following Paris attacks
Greece elections: Syriza and EU on collision course after election win for left-wing party
£18000 - £20000 per annum: Recruitment Genius: Superb opportunity for a BUYING...
£14560 - £15000 per annum: Recruitment Genius: This company offers personalise...
Negotiable: Recruitment Genius: A really exciting opportunity has arisen for a...
£22000 - £24000 per annum: Recruitment Genius: An established, family owned de...