Eurozone in disarray after Cyprus rejects bank levy

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Eurozone in disarray after Cyprus rejects bank levy

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Cypriot ministers voted down the proposed levy on the island’s bank deposits on Tuesday, thrusting the eurozone into further difficulties.

Bowing to pressure from the hundreds of protesters gathered outside the parliament, the ruling party of Cyprus abstained and 36 other lawmakers voted unanimously to reject the bill even though the country is on the brink of financial meltdown.

Among the protesters was Sandy Antoniou, a 29-year-old social worker. She said they have shown the way for other countries that have had to accept tough conditions in return for European aid:

“We were a strong example not only for this country but for Greece, Italy, Spain. The people can resist.”

Dutch Finance Minister Jeroen Dijsselbloem who chairs the 17 member eurogroup of finance ministers said the bloc “deeply regretted” the vote, but it is not game over yet.

“It’s disappointing, but at the same time it’s clear that the offer from the eurozone and the euro group to Cyprus still stands.”

Meanwhile the Cypriot Finance Minister, Michael Sarris, left for Moscow.

It is believed the government there could step in to help the Mediterranean island, given the high level of Russian deposits in Cypriot banks.