Tags: cypress | bank | accounts | bailout

Cyprus Bank Accounts to be Taxed to Fund Bailout

By    |   Sunday, 17 Mar 2013 08:04 PM

Every bank deposit in Cyprus will be taxed to help reduce the country’s bailout, but it was the only option to avoid bankruptcy, President Nicos Anastasiades said.

The tax of 9.9 percent on deposits larger than 100,000 euros and 6.75 percent on deposits below that number will be enforced on Tuesday, after a bank holiday on Monday, reports the Cyprus Mail. Banks were closed on Saturday and electronic transactions were suspended to avoid a bank run.

The tax is expected to raise 5.8 billion euros.

Eurozone finance ministers and the International Monetary Fund, meeting in Brussels, agreed to a 10 billion euro bailout. After the tax was agreed upon, the bailout was cut about 7 billion euros less than previously expected.

While the Cypriot economy makes up just 0.2% of the eurozone's overall output, some in the euro bloc fear a default by Cyprus might undermine progress in Greece, the BBC reports.

Fearing bank runs in their own countries, officials in Spain and Italy said Cyprus was a unique situation, and depositors there need not worry, The New York Times reported.

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Every bank deposit in Cyprus will be taxed to help reduce the country s bailout, but it was the only option to avoid bankruptcy, President Nicos Anastasiades said. The tax of 9.9 percent on deposits larger than 100,000 euros and 6.75 percent on deposits below that number...
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2013-04-17
Sunday, 17 Mar 2013 08:04 PM
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