The Cypriot House of Representatives rejected overwhelmingly on Tuesday the bill that would have inflicted a haircut on bank accounts.
There were 36 No votes and not a single Yes vote, as the 19 deputies of ruling Democratic Rally (DISY) who were present abstained, while another one of them was absent.
Cyprus speaker Yiannakis Omirou urged MPs to say «no to blackmail» as angry crowds also called for a «No» vote outside Parliament and held up signs warning that other financially crippled European nations like Italy and Spain could be next in line.
"There can only be one answer: no to blackmail,» Omirou, of the socialist EDEK party told deputies who met in emergency session.
"Our demand must be that this deal must be renegotiated. If we pass this tax there will be no foreign investor who will keep their money here,» he warned.
"There is no doubt, this is the most crucial session of our parliament. There is unrest among the people and they deserve an answer,» EDEK MP George Varnavas told the assembly.
DISY had unanimously decided not to take part in the vote because «it will strengthen the bargaining position of the Republic of Cyprus,» party member Nicos Tornaritis told Sigma TV.
But DISY coalition partner Marios Karoyian of DIKO said the rescue package must be «rejected».
"This is blackmail and DIKO proposes the bill is rejected, but yes to an adjustment programme... We want a European rescue, not European destruction,» he told fellow MPs.
George Perdikes of the Green party told parliament: «There is now a creditocracy where countries lose their sovereignty for an illegal loan agreement that is supposedly good for them but kills growth."
European Party MP Demetris Syllouris charged that the bailout terms were designed to destroy the banking sector in Cyprus that had been flourishing for decades, and especially hit Russian investments.
"Our lenders came not to support us, they wanted to annihilate the pillar of our economy which is the service sector ... They (Germany) must find another way to resolve their differences with Russia,» he said.
Many Cypriots blame Germany for leading the crippling demands imposed in return for the bailout, in a bid to punish Russia, where investors have placed vast amounts of cash in the island's banks.
"Why are the foreigners to blame, we won't accept it, we would rather take the hit 100 percent on our wages and pensions rather than on those who supported us,» said Syllouris.
Thousands of protesters lined the streets leading to the parliament building in Nicosia, many of them waving Russian flags, an AFP reporter said.
They held up banners that read «Hands off Cyprus» and the crowds chanted: «It will not pass,» referring to the rescue package.
Many also carried signs written in Italian and in Spanish saying that both financially-crippled countries could be next in line to face a similar painful rescue deal.
«Today it's me. Tomorrow it's you,» the signs read.
[Kathimerini English Edition & AFP]