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

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants 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.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs