Michael Birnbaum and Howard Schneider
March 19, 2013
Lawmakers in Cyprus on Tuesday rejected a bailout plan that would have rescued the country’s banks but forced savers to chip in for the cost, throwing down a gauntlet to the rest of Europe over the financial fate of the tiny island nation.
The plan to save Cyprus’s collapsing banks but to charge depositors for the service proved so controversial that not a single one of the 56 members of Cyprus’s parliament voted for the plan on Tuesday evening. The rejection leaves the fate of rescue plans up in the air, with other European leaders so far unwilling to step in to save Cyprus, whose bank deposits tower over the rest of its economy.
Parliamentarians “feel and they think that it’s unjust,” Cypriot President Nicos Anastasiades told reporters on Tuesday.