Mar. 19 - Cyprus's parliament could reject a divisive tax on bank deposits later today. The move would push the island closer to a default and banking collapse.
It makes up just snort point 2% of the Euro zone economy. But the crisis in Cyprus could shake the very foundations of the whole block. The Cypriot government has now proposed staring small -- from a divisive attacks from bank deposits. But the Cypriot president believes with no party majority in parliament is still likely to reject a proposed bailout plan. That will leave the tiny on and facing default and a banking collapse. The feeling from covering is that the house going to reject it was not. Because the field and the thing that you can send just. And be taken into those who. Which site promotion -- -- -- Eurozone leaders agreed to the weekends to give Cyprus at ten billion Euro bailout. But the deal -- on conditions Cypriot banks raise the rest of the money from saint this. That's proving highly controversial won't -- there's no sign yet that confidence in banks outside Cyprus has been lost. Credit act proposed at a minus. We're really talking about small deposits and I think at the moment provided policy makers can -- -- southern you're paying depositors. That there is uniqueness to the Cypriot situation and then not really interested. In taxing small account holders than we shouldn't see too much significant believe. From here -- mean. Thanks in Cyprus will remain closed until Thursday to avoid a bank front in the stock market has been suspended its. But the French finance minister has been playing down the risks to the rest of the year -- We are dealing was a specific situation. Which is. -- risk that. Doesn't create. Contagion. And we will address this question. Now it's up the separate government and parliament to take the right decisions. The new deal involves exempting same -- with less than 20000. Euros. But that still leaves a funding hole and it's not clear how that will be plugged. Moscow has denied -- it might help despite many eruptions holding accounts in Cyprus. But euros and two has also made and it went raise its offer any time.