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Cyprus MPs approve first EU bailout measures

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(Globalpost/GlobalPost)

The Cypriot parliament gave its approval late Friday to the first two of eight measures hammered out by the government in a desperate bid to rescue an EU bailout by a Monday deadline.

MPs voted in favour of a national solidarity fund to be set up through the nationalisation of public and private sector pensions and of capital controls to prevent a run on the island's troubled banks when they are finally due to reopen on Tuesday after a more than week-long break.

The votes followed prolonged talks between party leaders on the package aimed at raising 5.8 billion euros ($7.47 billion) to unlock loans worth 10 billion euros or face being denied European Central Bank (ECB) emergency funds.

More contentious measures remain to be debated notably a tax of up to 15 percent on bank deposits of 100,000 euros ($129,000) and more, a levy that in a slightly different form was rejected by MPs last Tuesday.

That was not expected to be put to MPs before Saturday.

MPs moved on Friday night to debate a proposed bank restructuring plan drawn up by the central bank that would separate good debts from bad in troubled banks, particularly second largest lender Popular Bank, or Laiki in Greek.

Acting ruling Disy party leader Averof Neophytou appealed to MPs to back the legislation saying it would guarantee all deposits of up to 100,000 euros, although those with balances of more might have to wait years to get all their money back.

He said the plan would also secure some 8,000 jobs in Popular Bank although a few hundred might be lost in the restructuring.

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http://www.globalpost.com/dispatch/news/afp/130322/cyprus-mps-approve-first-eu-bailout-measures