Cyprus Bailout: Cash Flown Out To British Troops

A plane has left Britain for Cyprus with one million euros onboard to ensure soldiers have access to cash.

Banks in Cyprus have been closed since before the weekend and will not reopen until Thursday in order to prevent a run on the banks as the government discusses taxing all savers in order to secure an EU bailout.

The Cypriot parliament went ahead with a session to vote on the levy and the bailout on Tuesday, despite the governing DISY party calling for a one-day delay while a solution that would prevent "the big dangers our country is facing" was sought.

British soldiers stationed on the island and their families would be able to borrow from the one million euros flown out of Brize Norton if cash machines and debit cards in Cyprus stop working completely, the Ministry of Defence said.

"The MoD is proactively approaching personnel to ask if they want their March, and future months' salaries paid into UK bank accounts, rather than Cypriot accounts," it said in a statement.

"We're determined to do everything we can to minimise the impact of the Cyprus banking crisis on our people."

Around 2,500 to 3,000 British military personnel are currently stationed in Cyprus.

Chancellor George Osborne has already pledged that military personnel and civil servants would be protected from the levy, telling Cabinet they would be "compensated in full" for any losses.

The seizure of savers' deposits, in return for shares in the lenders, was meant to raise 5.8 billion euros (£4.96bn), towards the country's financial rescue.

But outrage from Cypriots and the impact on international markets had already apparently pushed politicians to consider an exemption for smaller savers.

The draft Bill being discussed in parliament is believed to now suggest a 6.75% tax on all savings between 20,000 and 100,000 euros and 9.9% on all savings over 100,000 euros.

However, even with the amendment, opposition to the levy remained strong.

Parliamentary speaker Yiannakis Omirou urged MPs to vote against the Bill, which he called "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 said.

Marios Garoyian of the Diko party, which sits in coalition with DISY, said: "This is blackmail and Diko proposes the bill is rejected, but yes to an adjustment programme.

"We want a European rescue, not European destruction."

Outside parliament, thousands of protesters gathered holding up banners reading "Hands Off Cyprus" and chanted: "It will not pass".

Earlier it was reported that Cyprus' finance minister had resigned amid the fallout from the original proposal, but Reuters said Michael Sarris had told them by text message that there was "no truth" to the story.

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