Cyprus parliament postpones vote on bailout
Putin criticises proposed Cyprus levy as 'unfair, unprofessional and dangerous'
A man withdraws money from an automatic teller machine at a branch of Bank of Cyprus. A euro zone proposal would see Cyprus receive a bailout worth ¤10 billion but it has demanded depositors in its banks forfeit some money to stave off bankruptcy. Photograph: Reuters
Cyprus has postponed its parliamentary vote on a bank deposits levy until tomorrow.
Yiannakis Omirou, the speaker of parliament, said the delay was needed to give the government time to amend an international bailout deal agreed on last week.
Cyprus's parliament votes today on a plan to seize money from bank deposits as part of an EU bailout, a move that has sent a shiver across the bloc, caused the euro to tumble and stock markets to dive.
The Cypriot government is now trying to modify the deal to lower the burden on small savers with less than €100,000 in the bank. The modification must be approved by the other eurozone finance ministers before the Cypriot parliament can vote on it. The vote is now expected tomorrow afternoon.
Earlier Russia's president Vladimir Putin criticised the proposed Cyprus levy on banking deposits "unfair, unprofessional and dangerous," his spokesman Dmitry Peskov quoted the president as saying.
Mr Peskov said Mr Putin held a special meeting today to discuss developments in the debt-stricken Cyprus.
“Assessing the possible decision of imposing additional tax by Cyprus on deposits Mr Putin said that this decision, if taken, would be unfair, unprofessional and dangerous,” Mr Peskov said.
Russian banks had about €9.2 billion ($12 billion) placed with Cypriot banks and corporate deposits amounted to €14.6 billion ($19 billion) at the end of 2012, according to Moody's's rating agency.
The announcement at the weekend that tiny Cyprus would impose a tax on bank accounts as part of a €10 billion ($13 billion) bailout broke with previous Eu ropean practice that depositors' savings were sacrosanct.
Ahead of the vote in parliament, the government was working on a plan to soften the blow to smaller savers, by tilting more of the tax towards those with deposits greater than €100,000.
Europe an shares fell sharply with markets rattled by the radical bailout plan
which knocked confidence in European banks, though some investors saw the dips as a buying opportunity.
The Cyprus government says it has no choice but to accept the bailout with the levy on deposits, or go bankrupt.
Residents on the island emptied its cash machines to get their funds over the weekend. The move not only infuriated Cypriots, it unnerved depositors in the euro zone's weaker economies and investors fearing a precedent that could reignite market turmoil.
The euro fell in early trade, as did the rouble and currencies in central and eastern Europe.
