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Protesters chant slogans outside the Cypriot parliament Petros Giannakouris/AP/Press Association Images

Cyprus MPs overwhelmingly reject tax on deposits

Thirty six voted against it, while there were 19 abstentions.

CYPRUS MPS HAVE voted to reject a condition on a eurozone bailout deal.

They overwhelmingly rejected a tax on bank deposits demanded by international lenders as a condition for a bailout deal, with a vote of 36 against, 19 abstentions and none in favour.

“The bill has been rejected,” said house speaker Yiannakis Omirou earlier this evening, as thousands of protesters outside the parliament building in Nicosia exploded in joy.

Local media said the government would now try to renegotiate the terms of the deal with the troika of lenders, and at the same time seek other ways of making up a €5.8 billion shortfall.

Options included issuing a national bond scheme, restructuring the island’s banks and trying to attract further investments from Russia, reports said.

The deal would see eurozone countries offering €10 billion in emergency funding for the struggling island, with Cyprus due to come up with another €7 billion itself.

A deal struck by EU ministers late on Friday night would see a tax of 6.75 per cent on bank accounts with balances of under €100,000, with the rate rising to 9.9 per cent for higher balances.

This morning, the government published draft legislation to provide an exemption for accounts under €20,000, but did not increase the levy on higher accounts.

Read: British military plane takes €1 million to Cyprus>

Read: Cyprus to exempt small savers from deposit tax ahead of crucial vote>

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