Anastasiades faces severe test to get majority in Cyprus deposit tax vote

Cypriot Parliament is due to convene on Tuesday afternoon to debate and vote on a controversial deposit tax, with President Nicos Anastasiades struggling to get the support he needs for the levy to be approved.

As of Monday night, it looked extremely doubtful whether Anastasiades would get the 29 votes he would need for a majority in the 56-seat Parliament.

His Democratic Rally party (DISY) has 20 seats and will rely on support from its coalition partner, the Democratic Party (DIKO), which has eight MPs and then at least one of the two European Party (EVROKO) deputies or an independent lawmakers to support the tax.

The Communist Party (AKEL), the Socialists (EDEK) and the Greens said they would reject the levy.

However, DIKO indicated on Monday that it would not support the tax, which foresees deposits over 100,000 euros being taxed at 9.9 percent and those under 100,000 facing a one-off levy of 6.75 percent. It referred to the Eurogroup’s decision to approve the measure as “catastrophic.”

“They take us for guinea pigs,” said DIKO president Marios Karoyian.

His party is reported to have sent specific demands in connection to the tax to Anastasiades. It has also sought assurances that the European Central Bank would step in to support Cypriot banks if they suffer from capital flight when they open on Thursday after an extended bank holiday.

It was not clear late Monday what effect a Eurogroup decision to allow Nicosia to tweak the tax would have on potential support in Parliament.

Cypriot state broadcaster RIK reported that Anastasiades was considering a revised plan that would ensure deposits under 20,000 euros would not be taxed at all. Those between 20,000 and 100,000 would continue to face a 6.75 percent tax. The levy on deposits above 100,000 euros would remain at 9.9 percent, according to the report.

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