By Katie S. Irons
Cypriot officials are revising a financial bailout plan to rescue the country's troubled banking system. After much deliberation, the parliament of Cyprus rejected the 10 billion euro ($13 billion) bailout package that would have relied in some part on taxation of "ordinary bank depositors," according to The New York Times.
This small Mediterranean country has been in crisis since that package had been announced, with hundreds of demonstrators congregating outside of Parliament. According to The New York Times, lawmakers voted 36 against and 19 abstaining and zero in favor, "arguing that it would be unacceptable to take money from account holders."
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Cypriot soccer fans with an anti-bailout protest banner during the group E 2014 World Cup qualifying soccer match between Cyprus and Switzerland at GSP stadium in Nicosia, Cyprus, Saturday, March 23, 2013.[/caption]
"There are two choices, voting in favor which allows the country to avoid a disorderly bankruptcy, or rejection, which will have us face a disorderly bankruptcy with all that that entails," said Averof Neophytou, deputy chief of the Democratic Rally party to CBS News.
This rejection could send Cyprus into bankruptcy and possibly end the use of the euro currency within the country, according to CBS News. There is also a fear that this could interact with the global euro market.
Due to this being the first time European authorities have attempted to target people's personal bank accounts, this bailout has sent ripples of discontent throughout Europe, according to The Associated Press. Previously with bailed out countries like Greece, Ireland and Portugal, the money was raised through other means of taxation.
Cypriot banking customers have continued to pull all the money they could out of their accounts since Saturday, according to CBS News.
The market has remained firm even with the drama over the bailout because the European Central Bank (ECB) has continued to backup all eurozone markets, according to The Associated Press. The ECB stated that it will make sure Cyprus does not go bankrupt by providing support in case of an emergency.
"It's a lose-lose situation. There will be a huge deposit withdrawal from Cypriot banks with or without a (levy)," said Cyprus Greens lawmaker Giorgos Perdikis. "We should have the courage to make the right decisions that will restore the public's confidence, which was drastically shaken."
The euro has remained steady after the vote came in at $1.2880, according to the Associated Press.
