A man withdraws money from an ATM in the Cypriot capital of Nicosia
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Darling: Lenders 'doing everything you should not do' on Cyprus

Parliamentarians in Cyprus are to meet for an emergency session to discuss plans to bail out the country's banks, which were imposed by international lenders.

Cypriot depositors face a tax of up to 10% on their savings in Cypriot banks.

Former Labour chancellor Alistair Darling told Today programme presenter Evan Davis that the levy plan means that the authorities in Cyrus "have actually now said to people 'we'll come after your deposits no matter how small your savings are' and that seems to me to make it more likely that if you're a saver in Spain or in Italy for example, if you've had just the sniff of the EU or the IMF coming your way, you'll take your money out and you'll get a run on the bank."

"What they are doing is everything you should not do when you're trying to solve a problem like this," he added.

First broadcast on BBC Radio 4's Today programme on Tuesday 19 March 2013.

  • 19 Mar 2013