Euro plummets in Asia markets as Cyprus plans to levy bank deposits

The euro has plummeted in Asia markets amid worries about plans by Cyprus to impose a levy on its bank deposits as part of a bailout by the European Union.

On Monday, in Hong Kong the Hang Seng Index fell by 2.2 percent. Japan’s stock market dove 2.1 percent as its currency yen sank to the euro.

On March 15, Cyprus agreed on a bailout which includes a one-time tax of 9.9 percent on bank deposits holding more than 100,000 euros and of 6.7 percent on lower deposits.

The measure, which must first be ratified by the Cypriot parliament, is demanded by the European Union and the International Monetary Fund in order for Cyprus to receive 10 billion euros (about $13 billion) to rescue its economy.

Cypriot bank customers have reacted with anger that Cyprus is the only country that is forced to give up their savings, while the other four EU member states, which have applied for bailouts, have not received such a levy.

In an attempt to calm its residents, Cypriot President Nicos Anastasiades said on Sunday that he wanted to ease the bailout terms, as Cypriots have made mass cash withdrawals since the levy was announced.

“I fully share the unhappiness caused by a difficult and painful decision. That’s why I continue to fight with the Eurogroup to amend their decisions in the coming hours to limit the impact on small depositors,” Anastasiades said.

If Cyprus is to reject the levy demand then it would probably be forced to exit the eurozone and face bankruptcy, the Cypriot president stated.