The Cyprus parliament Tuesday overwhelmingly rejected a proposed levy on savings in banks as a condition for an EU-IMF bailout, throwing international efforts to rescue the latest casualty of the eurozone debt crisis into disarray.
The parliament voted by 36 votes to 19 abstentions to block the bill. In a vain effort to build consensus, the government had revised the provisions of the original bill so as to spare small savers with up to 20,000 euro deposits from a 6.75 percent levy.
It suggested that deposits between 20 thousand and 100 thousand euros be taxed with 6.75 per cent and deposits of over 100,000 euros be slashed by 9.9 percent.
However the changes did not convince opposition parties and even the junior coalition DIKO party, which sided with the opposition in rejecting the bill. Financial analysts say the Mediterranean island nation could now be tipped into financial chaos.