News / Europe

Cyprus Reconsiders Bank Deposit Tax to Solve Debt Crisis

A protester cries during an anti-bailout rally by employees of Cyprus Popular Bank, outside parliament, Nicosia, March 22, 2013.
A protester cries during an anti-bailout rally by employees of Cyprus Popular Bank, outside parliament, Nicosia, March 22, 2013.
VOA News
Cyprus is reconsidering whether to tax depositors' accounts at its troubled banks as the island nation desperately seeks a way to secure a bailout from its European neighbors.

Earlier in the week, the Cypriot parliament overwhelmingly rejected confiscating money from savers. But the deposit tax emerged again Friday as the Cypriot leaders neared a deadline imposed by the country's international lenders to raise $7.5 billion by Monday or face a cutoff in emergency funding for its banks.

The lenders have demanded that Cyprus raise the money as a condition for handing a $13-billion rescue package to the island.  Much of the money would refund the country's banks weighed down by bad investments in Greek government bonds.

If no solution is found, Cyprus could default on its loans, and possibly become the first country to leave the 17-nation euro currency bloc.

As parliament started consideration Friday night of several measures to raise the money it needs, the government said it envisions a 15-percent tax on accounts with more than $129,000, the threshold at which funds are not insured, while the defeated tax proposal covered insured savings as well.  A tax on the biggest deposits would impact numerous Russian oligarchs who have placed vast sums in the tax haven's banks.

Cyprus revived the deposit tax after it unsuccessfully sought more aid from Russia.  Prime Minister Dmitry Medvedev said Russia would only consider assisting Cyprus if the island first reaches an agreement with its European neighbors on a rescue package.

Cyprus said its future stands in the balance.  Government spokesman Christos Stylianides told the 56-member parliament that the Mediterranean country must be saved.

"The next hours will determine the future of the country.  We must all take responsibility," said Stylianides.

Cyprus is considering restructuring at least one of its key banks, Laiki.  The Bank of Cyprus and Laiki both urged parliament to impose a tax on the deposits of more than $129,000 as a way to resolve the crisis.
 
The island's banks are closed until Tuesday to prevent panicked investors from withdrawing large sums of money.  Anxious depositors, however, are able to withdraw limited amounts from automated teller machines.  

"We have not closed the door," said Medvedev. "We have not said that we would not discuss anything anymore and that we would not want even to hear anything because Cyprus is a European Union member state and it is not our business.  Of course, we have understandable economic interests there.  And we will and we are ready to discuss different options of supporting this country, bearing in mind that we have already given our support, we gave them a loan some time ago,  but only after a final scheme is worked out involving European Union countries and Cyprus itself.''

You May Like

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid