Cyprus government to present alternative bailout plan

  • Cypriot President Nicos Anastasiades is to propose to political leaders a "Plan B" for funding a controversial bailout.

    The move comes after politicians were left to find an alternative way forward after a bank levy was rejected by parliament on Tuesday.

    The levy was a condition of a $13 billion bailout offered by the European Union and the International Monetary Fund.

    Cyprus was expected to raise $7.5 billion through the one-off tax on savings.

    Parliamentarians on Tuesday rejected the altered plan to exempt savers with less than $25,750 from the charges while those with over $128,750 would still be charged at 9.9 percent. Depositors in between the two spectrums would pay 6.75 percent.

    No MPs voted in favor of the bill, with 36 voting against and 19 abstaining.

    Anastasiades’ new proposal is expected to go before parliament later this afternoon, according to state news agency, CNA.

    The new plan is reported to involve nationalizing pension funds.

    Cyprus’ banks, which have been closed all week to avert mass withdrawals, are expected to stay shut until next Tuesday.

    The Mediterranean island nation’s banks were badly exposed to Greece, which itself has been the recipient of two large bailouts.

    EU finance ministers had previously warned that two of Cyprus’ biggest banks could collapse if the levy deal failed to go through in some form.

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