Cyprus bank levy: UK to compensate troops and government workers

Cyprus residents queue outside a bank
Residents have been queuing outside banks to withdraw their savings from cash machines.

The UK will compensate any British troops in Cyprus hit by plans to introduce a bank levy as part of a £9bn EU bailout, the chancellor has said.

British government workers would also be protected, George Osborne said.

Under the plans, people in Cyprus with up to 100,000 euros in the bank would have to pay a one-time tax of 6.75%; those with more than that 9.9%.

The move could affect many of the 3,000 UK military personnel in Cyprus, and tens of thousands of expatriates.

An emergency session to discuss the 10bn-euro ($13bn; £9bn) deal agreed by the EU and IMF on Friday is to take place on Monday.

The debate and a presidential address were to happen on Sunday but was postponed, state media said.

‘Disorderly bankruptcy’

Residents have been queuing outside banks to withdraw their savings from cash machines.

Mr Osborne told the BBC’s Andrew Marr programme: “For people serving in our military and serving our government we are going to compensate anyone affected by this bank tax; people who are doing their duty for our country in Cyprus will be protected from this Cypriot bank tax.”

He added: “Anyone who thinks that Britain is alone in having these challenges… should realise it’s a very tough economic situation out there.”

On Saturday President Nicos Anastasiades admitted the deal was “painful” but said it was necessary to avoid a “disorderly bankruptcy”.

However, his Democratic Rally party – which has 20 seats in the 56-member assembly – needs support from other factions to ratify the bailout.

Sharon Bowles MEP, chair of the European Parliament’s Economic and Monetary Affairs Committee, said she was appalled by the plans.

“This grabbing of ordinary depositors’ money is billed as a tax, so as to try and circumvent the EU’s deposit guarantee laws. It robs smaller investors of the protection they were promised.”

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