Reax as vote on plan to levy tax on bank deposit is postponed

A vote on a bailout package for Cyprus that includes an immediate tax on all savings accounts has been postponed until Tuesday evening.

The speaker of the island's Parliament said the delay was needed to give the government time to amend the deal reached over the weekend that prompted an outcry from those who thought their money was safe.

In order to get 10 (b) billion euros (13 (b) billion US dollars) in bailout loans from international creditors, Cyprus agreed to take a percentage of all deposits - including ordinary citizen savings - an unprecedented step in Europe's three-and-a-half year debt crisis.

The news was a big surprise and stoked fears that deposits in other countries could be targeted.

"Unfortunately, this will not be limited to Cyprus, maybe it will be extended to some other countries, Italy, Spain, and so on," said Marios Garoyian, leader of DIKOS (Centre Party), on his way out of a briefing of lawmakers by the Cypriot president.

Shares around the world and the euro took a pounding on Monday even though the Cypriot economy accounts for only 0.2 percent of the combined output of the 17 European Union countries that use the euro.
Cyprus' banks were closed on Monday for a scheduled public holiday.

The Cypriot government is now trying to modify the terms of the original deal and in particular to get a better deal for small savers with less than 100,000 euros (129,472 US dollars.)

The weekend deal foresaw a one-off levy of 6.75 percent on those savings, rising to 9.9 percent for those above the 100,000 euro mark.

Some 25 lawmakers from communist AKEL, socialist EDEK and the Green party have said they would vote down the levy that they had criticised as disastrous.

Any modification must be approved by the other eurozone finance ministers before the Cypriot parliament can vote on it.