Cyprus Postponed Voting on Bank Deposits Tax

Cyprus Postponed Voting on Bank Deposits Tax

 

On Monday the Cyprus Parliament postponed the voting regarding bank deposits tax introduction as a condition for getting financial aid from the EU again.

Due to the Cyprus situation, on March 18 the collapse on the European stock exchanges took place. Investors demonstrate negative attitude to the possible introduction of bank deposits tax in Cyprus.

A mass demonstration against that condition laid down by the Eurogroup took place in front of the Cyprus Parliament building. Thousands of manifestants have gathered next to the country’s parliament to express their protest against actual expropriation of the part of their funds.

Cypriots were not alone in opposing the prospective tax introduction. Russian president Vladimir Putin and Prime Minister Dmitry Medvedev also attacked this intention of Cyprus authorities. They believe the initiative is unfair, unprofessional and even dangerous decision.

According to the unofficial information, Cyprus president Nicos Anastasiades has informed European colleagues that the majority of the parliamentarians would not vote for the bill today.

Indeed, the parliamentarians must make a difficult decision. Adoption of conditions laid down by the Eurogroup may destroy banking sector in Cyprus, whereas refusal from these conditions and, therefore, from the IMF and the EU financial aid may lead to the country’s default. Cyprus president will try to make another compromise with the Eurogroup.

According to the official statement of the Cyprus Central Bank representative, the banks in Cyprus will be closed till March 21, 2013. All bank transactions with deposit accounts in Cyprus banks are suspended from March 17. 

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