The Cypriot parliament has approved a levy on bank deposits, a key condition of the €10 billion bailout agreement with the Eurogroup and the International Monetary Fund (IMF). The measure is designed to raise €5.8 billion to recapitalize the nation’s banks and avoid a potential collapse of the financial system.

The levy will affect both insured and uninsured deposits, with rates varying depending on the amount held. Deposits under €100,000 will face a lower rate compared to those exceeding that threshold. The exact rates are still subject to final confirmation.

The announcement of the levy has sparked widespread anger and panic among Cypriots, who fear losing a significant portion of their savings. Long queues formed at ATMs as people attempted to withdraw their funds, although restrictions have been imposed to prevent a bank run.

The decision has also raised concerns about the stability of the Eurozone and the potential for similar measures to be implemented in other struggling economies. The move has been criticized by some economists and political figures as a violation of depositor rights and a dangerous precedent.

The Cypriot government maintains that the levy is necessary to secure the bailout and prevent a far more catastrophic outcome for the country’s economy. Negotiations with international lenders are ongoing to finalize the details of the bailout package and implement the necessary reforms.

Key Points:

• Levy approved on bank deposits in Cyprus.
• Part of a €10 billion bailout agreement.
• Aims to raise €5.8 billion.
• Sparked outrage and panic among depositors.
• Raises concerns about Eurozone stability.

The situation remains fluid, and further developments are expected in the coming days as Cyprus grapples with the challenges of implementing the bailout agreement and restoring confidence in its banking system.