Mal Maiden: Forget certainty until Cyprus is fixed
It's a drop in the ocean of European troubles, so why does the Cyprus rescue package have markets spooked?PT6M6S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2gevu 620 349 March 20, 2013
NICOSIA: Angry MPs have rejected the terms of a bailout aimed at saving Cyprus from bankruptcy, decrying as "blackmail" a deal that had been reached with a troika of lenders that now lies in tatters.
"The bill has been rejected," house speaker Yiannakis Omirou said, as thousands of protesters who had demanded the house spurn the onerous measures exploded in joy outside the parliament building in Nicosia.
Mr Omirou gave a breakdown of 36 votes against, 19 abstentions and none in favour.
Anger .... protesters outside parliament urge MPs to reject the terms of the bailout. Photo: AP
Media reports said the government would now try to renegotiate the terms of the deal with the European Union, the European Central Bank and the International Monetary Fund.
It would at the same time seek other ways of making up a €5.8 billion euros ($7.28 billion) shortfall, with a bond issue, bank restructure and trying to secure more Russian investments among the options.
Mr Omirou, of the socialist Edek party, had earlier told deputies, "There can only be one answer: no to blackmail.
"Our demand must be that this deal must be renegotiated. If we pass this tax there will be no foreign investor who will keep their money here," he warned.
Outside the parliament, equally angry crowds called for a "No" vote and held up signs warning that other financially crippled European nations such as Italy and Spain could be next.
Under the €10 billion deal sealed with eurozone partners on Saturday, a controversial levy of at least 6.75 per cent was to be slapped on all bank deposits across the island.
The parliamentary finance committee, in a bid to make the package more palatable, on Tuesday dropped the tax on bank savings below €20,000, while retaining at 6.75 per cent the levy on deposits of €20,000-€100,000 and at 9.9 per cent for amounts above €100,000.
The measure was not enough to convince MPs, with the 19 members of President Nicos Anastasiades's Disy party abstaining and other MPs voting outright against the measure.
Disy coalition partner Marios Garoyian of the Diko party had during the debate urged the rescue package be rejected.
"This is blackmail and Diko proposes the bill is rejected, but yes to an adjustment program . . . We want a European rescue, not European destruction," he told fellow MPs.
Rejection of the tax leaves Cyprus with a shortfall of €5.8 billion in funds it needs to dig itself out of crippling debt.