By Nick Squires, Nicosia
11:25AM GMT 24 Mar 2013
Nicos Anastasiades, the Cypriot president, and Michalis Sarris, his finance minister, are on their way to Brussels for emergency talks over a deal under which deposits of more than 100,000 euros in the Bank of Cyprus will be hit by a 20 per cent levy.
Deposits of more than 100,000 euros in other banks will be targeted by a four per cent forced levy.
Cyprus’s leaders are expected to submit to the drastic plan – which critics call daylight robbery – in return for a 10 billion euro bail-out loan to save the country from bankruptcy.
While the deal may stave off immediate disaster, many Cypriots said the measures will shatter confidence in the island’s hugely profitable banking and financial services industry and lead to a massive exodus of investors, among them Russian tycoons and British retirees.
Islanders also fear that as the bank levies bite, businesses and big investors will have to start laying off staff, heralding high levels of unemployment.