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Cyprus' parliament rejected a Eurogroup-imposed haircut on bank deposits, plunging the eastern Mediterranean island into economic uncertainty verging on uncontrolled default.
The 56-member chamber rejected the bill with 36 against, 19 abstentions and none in favor.
The levy was decided at the end of last week at a Eurogroup finance ministers' meeting in Brussels, after Cyprus President Nicos Anastasiades was warned that emergency liquidity assistance to the Cypriot hard-pressed banks would be immediately discontinued.
In a vain effort to build consensus, the government had revised the provisions of the original law so as to spare small savers with up to 20,000-euro (25,800-U.S. dollar) deposits from a 6.75-percent levy.
It suggested that deposits between 20,000 and 100,000 euros be taxed with 6.75 percent and deposits of over 100,000 euros by 9.9 percent.
However, the measure did not convince opposition parties and even a junior government coalition DIKO party.
President Anastasiades' DISY party with 20 seats in parliament during the debate abstained when the bill was voted upon. One party deputy was absent on a trip abroad.
