cyprus bailout deal looks set for collapse

Cyprus Seizes Bank Deposits

The small island country of Cyprus has rocked Asian, European and U.S. financial markets with a plan to deal with its mounting debt and financial issues. Last week, the country announced that it would seize as much as 10 percent of cash deposits in the nation’s banking system.

The proposal is an attempt to meet bailout obligations from the European Union to solidify the economic issues and come to grips with the debt that Cyprus has racked up. After the announcement by Cypriot finance officials, there was a run on the banks in the tiny island country, as savings account holders raced to withdraw their funds before the government could confiscate any funds.

The Cypriot government responded to the run by closing all the country’s banks until March 21. The actions by Cyprus officials has, for the time being, ruined any trust in the banking system for many depositors.

Cyprus races to rework savings tax after closing banks till Thursday – as it happened
http://www.guardian.co.uk/business/2013/mar/18/eurozone-crisis-cyprus-bailout-savers-markets