Cyprus' parliament today postponed until tomorrow a vote on a controversial levy on all bank deposits that the cash-strapped country's creditors had demanded in exchange for a $13 billion bailout. The announcement set off an immediate scramble among top European officials, with reports that the European Central Bank was pressuring Cypriot authorities to hold the vote without delay. The stakes are high for the tiny island nation of 1 million, because a rejection of the levy by lawmakers could push Cyprus into bankruptcy and possibly out of the euro. Officials also fear a massive run Tuesday on Cypriot banks—after a national holiday tomorrow—no matter which way the voting goes. "There are two choices, voting in favor which allows the country to avoid a disorderly bankruptcy, or rejection, which will have us face a disorderly bankruptcy with all that that entails," says a lawmaker.
The Cyprus News Agency said President Nicos Anastasiades had personally requested the postponement, but no reason was given. The decision by Cyprus' 16 eurozone partners and the IMF to impose a one-time tax of 6.75% on all deposits under $131,000 and 9.9% over that amount has enraged Cypriot politicians, which brings into sharp doubt its approval chances. It marks the first time the IMF and the 17 eurozone nations have dipped into people's savings to finance a bailout. "What happens to Italy now? What happens to Spain? What happens to other countries?" complained one lawmaker. (Read more Cyprus stories.)