Cyprus Rejects Bank Tax Bill

It would have seized money from individuals' banking accounts
By Newser Editors and Wire Services
Posted Mar 19, 2013 1:41 PM CDT
Cyprus Rejects Bank Tax Bill
Cypriots use ATM machines outside of a closed bank in Nicosia, Cyprus.   (AP Photo/Petros Giannakouris)

Cypriot lawmakers today rejected a critical draft bill that would have seized part of people's bank deposits in order to qualify for a vital international bailout, with not a single vote in favor. The rejection leaves Cyprus's bailout in question. Without external funds, the country's banks face collapse and the government could go bankrupt. Nicosia will now have to come up with an alternative plan to raise the money—the government could try to offer a compromise bill that would be more palatable to lawmakers. The Washington Post lays out some of the options for Cyprus at its Wonkblog.

The bill, which had been amended this morning to shield small deposit holders from the deposit tax, was rejected with 36 votes against and 19 abstentions. One deputy was absent. "No to new colonial bonds, no to subjugation, no to national dishonor and raw blackmail," said house speaker Yiannakis Omirou during the debate before the vote. After the vote failed, he said political leaders will have a meeting with the president tomorrow to discuss the next steps. Hundreds of protesters outside Parliament cheered in jubilation and sang the national anthem when they heard the bill had not passed. (Read more Cyprus stories.)

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