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Cyprus to hold crisis talks after bailout rejection Cyprus holds crisis talks after bailout rejection
(35 minutes later)
Political leaders in Cyprus are to meet for emergency talks after its parliament overwhelmingly rejected an international bailout deal. Political leaders in Cyprus are meeting for emergency talks after its parliament overwhelmingly rejected an international bailout deal.
Cypriot President Nicos Anastasiades will meet party leaders to hammer out a Plan B after a one-off tax on savings failed to get the support of any MPs. Cypriot President Nicos Anastasiades is meeting party leaders to hammer out a Plan B after a one-off tax on savings failed to get the support of any MPs.
Finance Minister Michalis Sarris is in Moscow to seek help from Russia, which has heavy investments in Cyprus. Finance Minister Michalis Sarris is in Moscow to seek help from Russia, which holds multi-billion dollar investments.
Germany says banks in Cyprus may never reopen if a bailout is not agreed.Germany says banks in Cyprus may never reopen if a bailout is not agreed.
Banks have been shut until Thursday to prevent mass withdrawals. The stock exchange remains closed.Banks have been shut until Thursday to prevent mass withdrawals. The stock exchange remains closed.
President Anastasiades has called the emergency meeting of party leaders for Wednesday morning to "examine alternative plans to address the situation that may arise following... the parliamentary vote", his office said. President Anastasiades called the emergency meeting of party leaders and the central bank governor for Wednesday morning to "examine alternative plans to address the situation that may arise following... the parliamentary vote", his office said.
Mr Anastasiades, who was elected to the presidency on 24 February, will also hold a cabinet meeting and talks with the European Union, European Central Bank and International Monetary Fund (IMF).
Bank restructuring, a bond issue and more Russian funding are possible options.Bank restructuring, a bond issue and more Russian funding are possible options.
'Fully respected''Fully respected'
The controversial levy had been proposed as the condition for a 10bn-euro (£8.7bn; $13bn) European Union and International Monetary Fund bailout. Cyprus was expected to raise 5.8bn euros through the one-off tax on bank savings. The controversial levy had been proposed as the condition for the 10bn-euro (£8.7bn; $13bn) EU and IMF bailout. Cyprus was expected to raise 5.8bn euros through the one-off tax on bank savings.
The plan was altered on Tuesday to exempt savers with less than 20,000 euros (£17,000), but a 6.75% charge on deposits of 20,000-100,000 euros and a 9.9% charge for those above 100,000 euros remained.The plan was altered on Tuesday to exempt savers with less than 20,000 euros (£17,000), but a 6.75% charge on deposits of 20,000-100,000 euros and a 9.9% charge for those above 100,000 euros remained.
However, parliament rejected the deal, with 36 MPs voting against it, 19 abstaining and none in favour.However, parliament rejected the deal, with 36 MPs voting against it, 19 abstaining and none in favour.
Protesters outside parliament reacted with joy at the decision.Protesters outside parliament reacted with joy at the decision.
Mr Anastasiades said he "fully respected" the vote.Mr Anastasiades said he "fully respected" the vote.
He said he had spoken to Russian President Vladimir Putin, as Cyprus sought alternative financing.He said he had spoken to Russian President Vladimir Putin, as Cyprus sought alternative financing.
Mr Sarris is meeting his Russian counterpart Anton Siluanov on Wednesday to discuss the easing of the terms on a 2.5bn euro loan Moscow gave Cyprus in 2011 - and the possibility of further funding.Mr Sarris is meeting his Russian counterpart Anton Siluanov on Wednesday to discuss the easing of the terms on a 2.5bn euro loan Moscow gave Cyprus in 2011 - and the possibility of further funding.
He said on Wednesday he was hopeful of a new loan agreement.He said on Wednesday he was hopeful of a new loan agreement.
"We're hoping for a good outcome, but we cannot really predict," he said.
Cyprus has attracted money through its lower taxes, with Russians holding between a third and half of all Cypriot deposits.Cyprus has attracted money through its lower taxes, with Russians holding between a third and half of all Cypriot deposits.
Russian private and corporate deposits are believed to total about $30bn.Russian private and corporate deposits are believed to total about $30bn.
Mr Putin had called the bailout deal "unfair, unprofessional and dangerous".Mr Putin had called the bailout deal "unfair, unprofessional and dangerous".
Analysts say Russia may provide more funding in return for interests in Cyprus's offshore energy fields.Analysts say Russia may provide more funding in return for interests in Cyprus's offshore energy fields.
After Cyprus rejected the vote, Dutch Finance Minister Jeroen Dijsselbloem said that eurozone finance ministers still stood "ready to assist Cyprus in its reform efforts". One offer of help has come from Cyprus's Orthodox Church, which is a major shareholder in the third-largest domestic lender, the Hellenic Bank.
Archbishop Chrysostomos I said on Wednesday the Church was willing to mortgage its assets to invest in government bonds.
After Cyprus rejected the bailout, Dutch Finance Minister Jeroen Dijsselbloem said that eurozone finance ministers still stood "ready to assist Cyprus in its reform efforts".
However, German Finance Minister Wolfgang Schaeuble warned Cyprus that its crisis-stricken banks might never be able to reopen if it rejected the bailout.However, German Finance Minister Wolfgang Schaeuble warned Cyprus that its crisis-stricken banks might never be able to reopen if it rejected the bailout.
He said major Cypriot banks would be "insolvent if there are no emergency funds".He said major Cypriot banks would be "insolvent if there are no emergency funds".
Mr Schaeuble said the banking system in Cyprus was "bloated" and "not sustainable".Mr Schaeuble said the banking system in Cyprus was "bloated" and "not sustainable".
"Someone needs to explain this to the Cypriots", he said."Someone needs to explain this to the Cypriots", he said.
Meanwhile, the UK Ministry of Defence said on Tuesday evening that a plane carrying 1m euros had arrived in Cyprus as a contingency measure to provide military personnel and their families with emergency loans.Meanwhile, the UK Ministry of Defence said on Tuesday evening that a plane carrying 1m euros had arrived in Cyprus as a contingency measure to provide military personnel and their families with emergency loans.
The money is to be used for British personnel and their families if cash machines and debit cards stop working.The money is to be used for British personnel and their families if cash machines and debit cards stop working.