Cyprus to rework bailout

  • Cyprus has been told it can rework the terms of a bailout deal that has triggered public anger and led to heavy cash withdrawals, according to German and European bank officials on Monday.

    Earlier in the day, President Nicos Anastasiades held meetings with MPs to discuss the terms as a vital vote in parliament was again postponed.

    The vote is expected to take place at 6pm local time. It was to have been held on Sunday. Meanwhile, Cyprus banks will remain closed until Thursday.

    The $13 billion deal agreed with the European Union and the International Monetary Fund marks a radical departure from aid packages and conditions issued in the past.

    People with less than $130,000 in their accounts will pay a one-time tax of 6.75 percent while those with larger amounts will lose 9.9 percent.

    The depositors will be compensated with the equivalent amount in shares in their banks.

    It is believed that a heavy presence of Russian money in Cypriot banks was a factor behind the levy.

    Russian President Vladimir Putin has described the proposed levy "unfair, unprofessional and dangerous".

    Anastasiades, who was elected last month, and his Democratic Rally party must rally support from other factions in order to ratify the bailout.

    Media reports suggest that the president may reduce the rate to 3 percent for small-scale customers and raise the levy on larger depositors to 12.5 percent.

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