Savings account seizure plan draws fury in Cyprus

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Associated Press

Posted on March 18, 2013 at 10:02 PM

Updated Monday, Mar 18 at 11:33 PM

NICOSIA, Cyprus (AP) — The government in Cyprus has shut down banks until later this week while lawmakers wrangle over how to keep the island nation from bankruptcy.

Meanwhile, a plan to seize up to 10 percent of savings accounts in Cyprus to help pay for a financial bailout is being met with fury.

Though the euro and stock prices of European banks fell Monday, global financial markets largely remained calm, and there's little sense that bank account holders elsewhere across the continent face similar risk.

Political leaders in Cyprus are scrambling to devise a new plan that would not be so burdensome for people with less than €100,000 in the bank.

The authorities have delayed a parliamentary vote on the seizure of €5.8 billion and have ordered banks to remain shut until Thursday while they try to modify the deal, which must be approved by other eurozone governments. A rejection of the package could see the country go bankrupt and possibly drop out of the euro currency.

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