Loading…
Sunday, December 28, 2014
Current Weather
Loading Current Weather....
HomeNewsWorld
Published: Tuesday, 3/19/2013

Cyprus proposes no charge on small account holders

ASSOCIATED PRESS

NICOSIA, Cyprus  — Cypriot government officials today proposed a change to a plan to raid bank deposits that has caused outrage in the country and sent jitters through European financial markets.

Just hours ahead of an expected vote in the country's 56-member Parliament on the seizure of a percentage of deposits, officials sought to limit the impact on small savers.

A new draft bill discussed in Parliament's finance committee proposed to spare all deposits below €20,000 ($25,900) from a charge.

Those between €20,000 and €100,000 would still have a 6.75 percent charge imposed, and those above €100,000 would be hit for 9.9 percent, in line with the original plan put forward at the weekend.

A vote in favor of the bank account confiscation is needed if Cyprus is to get €10 billion in rescue loans from its euro partners and the International Monetary Fund. The seizure of deposits is meant to raise €5.8 billion, which is part of the country's rescue.

If the vote fails to get through Parliament, Cyprus faces potential bankruptcy and a possible from the euro, which could reignite concerns in financial markets over the future of the single currency.

In a sign of the scale of disagreement over the deposit charge, the country's central bank governor recommended that no accounts below €100,000 be touched. That level represents the amount of savings that are supposed to be insured if a bank collapses.

Banks have been shut until Thursday to prevent a bank run.

Finance Minister Michalis Sarris is to fly to Moscow later today to meet with his Russian counterpart. About a third of all deposits in Cypriot banks are believed to be held by Russians.

Christine Lagarde, managing director of the International Monetary Fund, said in a speech today in Frankfurt that the IMF was “extremely supportive of the Cypriot authorities’ intentions to introduce more progressive rates in the one-off tax.”



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories