The Cypriot Government was racing against the clock today to push through a deeply unpopular levy on bank deposits that it agreed to in return for a €10 billion (£8.66 billion) bailout from the European Union.
The levy, which will apply to all account holders from pensioners to Russian oligarchs, was part of a deal struck in Brussels last night. Those with deposits of more than €100,000 will be hit with a 9.9 per cent charge. Under that the levy sinks to 6,5%.
Thousands of desperate people tried to get as much money from their bank accounts as they could. They were upset and furios. But the automatic tellers were soon empty.
Eurozone leaders and the IMF have announced an unprecedented levy on all deposits in Cypriot banks as the sting in the tail of a 10-billion-euro bailout for the near-bankrupt government in Nicosia.
Intended to apply to everyone from pensioners to Russian oligarchs alleged to have billions stashed away in what officials say is a bloated Cypriot banking sector, the "stability levy" immediately raised a flood of concerns among finance experts over a possible bank run in bigger eurozone economies, where fragile public finances are also under scrutiny.
European Central Bank's Mario Draghi, said the "upfront, one-off" tax is expected to raise 5.8 billion euros on top of the loans still to be finalised by eurozone parliaments.