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Last updated at 17:09 GMT, Monday, 18 March 2013

Cyprus tries to sort out its finances

Summary

18 March 2013

Cyprus's parliament has delayed a vote on a solution to sort out its money problems. The 10bn-euro ($13bn) payout agreed by the EU and IMF demands that all bank customers pay a one-off tax and this has led to large cash withdrawals.

Reporter:

Mark Lowen

Cyprus President Nicos Anastasiades

Cyprus President Nicos Anastasiades delivers some controversial news.

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Report

After the furious public reaction to this bailout deal, the fight now turns to parliament. MPs will debate the new tax before it is voted upon later on today (Monday). And it's by no means certain to pass, with some coalition members set to rebel.

The President argued in a televised address last night that the deal was the only way to avoid bankruptcy. But in an attempt to soften the blow, he is now trying to reduce the levy on those with smaller deposits.

If the bill is rejected by MPs, today's bank holiday might be extended so as to avoid a run on the banks. And all the while, those in debt-stricken countries outside Cyprus are watching to see if this levy will set a precedent and whether they should fear for their savings too.

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Vocabulary

furious

very angry

bailout deal

agreement to do something in exchange for a payment

set to rebel

planning to disagree with the proposals

a televised address

a speech or announcement made on television

bankruptcy

not being able to pay what it owes

to soften the blow

to make a difficult thing easier to accept

levy

tax

smaller deposits

less money saved in a bank account

a run on the banks

a rush to take out as much money as possible from the banks

set a precedent

to do something that may be copied by a lot of other people

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