BREAKING: Cyprus Parliament unanimously rejects EU bailout. March 19th 2013

History is written in tiny Cyprus. Parliament unanimously rejects EU bailout. : Cyprus MPs rejected EU-IMF bailout tax on bank depositors. March 19th 2013


Cyprus' parliament has rejected a controversial levy on bank deposits, proposed as part of an EU-IMF 10bn-euro (£8.7bn; $13bn) bailout package.

No MPs voted for the bill, with 36 voting against and 19 abstaining.

The finance ministry had modified the package, proposing an exemption for savers with smaller deposits, but opposition had remained fierce.

Thousands of protesters who had filled the streets outside parliament reacted with joy to the news of the vote.

EU finance ministers have warned that Cyprus' two biggest banks will collapse if the deal does not go through in some form.

However, there has been widespread outrage on the island at the prospect of ordinary savers being forced to pay a levy of 6.75%

The plan was changed to exempt savers with less than 20,000 euros (£17,000), with those over 100,000 euros charged at 9.9%, but this was not enough to placate critics.

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Levy basics
Depositors with 20,000 - 100,000 euros deposited must pay 6.75%
Those with more than 100,000 in their accounts must pay 9.9%
Depositors will be compensated with the equivalent amount in shares in their banks
The levy is a one-off measure
Eurozone wants Cyprus to get 5.8bn euros from deposits, in exchange for a 10bn-euro EU/IMF loan
Total of about 68bn euros on deposit in Cypriot banks, foreigners hold about 40% - most of them Russians
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Cyprus crisis: What happens next?
Q&A: Cyprus bailout

Meanwhile, the UK ministry of defence said a plane carrying 1m euros was heading to Cyprus as a contingency measure to provide military personnel and their families with emergency loans.

The money is to be used for British personnel and their families if cash machines and debit cards stop working.

Read more: http://www.bbc.co.uk/news/world-europ..