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Cyprus holds fire on savings tax debate until Monday

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Cyprus holds fire on savings tax debate until Monday


Cyprus’s president has postponed a meeting due to debate the EU’s proposed levy on bank savings, and parliament has followed suit, delaying an emergency session until Monday.

The EU decision to make savers partially fund an international bailout sparked outrage in Cyprus following the Eurogroup meeting in Brussels.

The EU offered Cyprus 10 billion euros to stave off bankruptcy, and the collapse of the island’s two biggest banks, which are heavily exposed to Greece.

But the terms of the deal, which imposes a charge of up to 10 percent on savings accounts, breaks a previous taboo of protecting depositors.

Cypriots flocked to cash machines through the weekend to take out as much money as they could, although electronic transfers were suspended.

An estimated 37 percent of deposits in Cyprus belong to foreigners; one reason the eurozone ministers felt the tax on savings was justified.

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