A man walk past a graffiti which reads "Troika go home" in the Cypriot capital of Nicosia on March 16, 2013. Eurozone finance ministers agreed on a bailout for Cyprus, the fifth international rescue package in three years of the debt crisis. AFP PHOTO/YIANNIS KOUTOGLOU

A man walks past anti-austerity graffiti in the Cypriot capital of Nicosia at the weekend. The measures included in a bailout package for Cyprus have shocked the country's citizens. Photo: AFP

Europe's debt crisis tsar has promised that an unprecedented raid on the bank accounts of Cypriots will not be repeated.

Euro-area finance ministers agreed to a tax on Cypriot bank deposits as officials unveiled a €10billion ($A12.57 billion) rescue plan for the country, the fifth since Europe's debt crisis hit in 2009.

In a move that has caused shock and dismay among its citizens, Cyprus will impose a levy of 6.75 per cent on deposits of less than €100,000 - the ceiling for European Union account insurance - and 9.9per cent above that.

Asked whether a future EU-mandated bank levy can be categorically ruled out, Olli Rehn, who is the European Union Economic and Monetary Commissioner, said that ''it can and there is no concrete case where it should be considered''.

Mr Rehn said he did not expect an adverse market reaction to the precedent-setting tax on deposits both above and below the insured limit of €100,000.

''Market forces understand that the sheer size of the problem of the Cypriot banking sector and its troubles were so huge that we needed to take very substantial measures,'' he said.

''This kind of stability fee is clearly a much better choice from the point of view of financial stability and Cypriot citizens than a full-scale bail-in, which would have led to very chaotic consequences in the Cypriot economy.''

However, analysts said the move would increase pressure on the euro. Holger Schmieding, chief economist at Berenberg Bank, said the risk it could backfire was ''not zero'' and Europe was in ''unchartered territory again''.

The measures will raise €5.8 billion, Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area ministers, told reporters after 10 hours of emergency talks in Brussels.

The euro region's bailout kitty and, possibly, the International Monetary Fund will look to make up the shortfall. A partial ''bail-in'' of junior bondholders is also possible.

''Further measures concern the increase of the withholding tax on capital income, a restructuring and recapitalisation of banks, an increase of the statutory corporate income tax rate and a bail-in of junior bondholders,'' European finance ministers said in a communique released after the talks.

The European Central Bank will use its existing facilities to make funds available to Cypriot banks as needed to counter potential bank runs. Depositors will receive bank equity as compensation.

Cypriot Finance Minister Michael Sarris said the plan was the ''least onerous'' of the options Cyprus faced to stay afloat.

''It's not a pleasant outcome, especially of course for the people involved,'' said Mr Sarris.

While the tax on deposits will hurt wealthy Russians with money in Cypriot banks, it will also sting ordinary citizens. Some ATMs in the country have run out of cash, Erotokritos Chlorakiotis, general manager of the Cooperative Central Bank, told state-run CYBC.

Funds to pay the levy were frozen in accounts immediately, ECB executive board member Joerg Asmussen said. The levy will be assessed before Cypriot banks reopen on March 19 after a March 18 national holiday. Mr Sarris said electronic transfers would also be limited until then.

''As it is a contribution to the financial stability of Cyprus, it seems just to ask a contribution of all deposit holders,'' Mr Dijsselbloem said, noting the country's financial industry was five times the size of its economy. The plan includes ''unique measures'' that address the ''exceptional nature'' of Cyprus and show ''inflexible commitment to financial stability and the integrity of the euro area''. The IMF will consider contributing money to the rescue, said IMF managing director Christine Lagarde, who travelled to Brussels for the talks. ''We believe that the proposal as outlined by Jeroen is actually sustainable,'' she said.

Agencies

Presidential backflip

Cyprus' President Nicos Anastasiades will try to persuade lawmakers to back a plan to impose losses on the island-nation's depositors less than a month after he won an election vowing to prevent that happening.

On Sunday, Mr Anastasiades was poised to defend his decision to accept a rescue that includes the euro area's first move to penalise depositors when he addresses parliament before lawmakers vote on the legislation. With his Disy party holding 20 seats in the 56-seat legislature, he needs at least nine more votes to secure approval and avoid the financial collapse of the region's third-smallest economy.

''We faced decisions that had already been taken,'' Mr Anastasiades said.

He said the European Central Bank would stop providing liquidity to one of the country's banks on March 19, leading to its collapse, if his government did not accept the rescue package.

He had been given the choice of ''the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis''.