Cypriot MPs approve bills for bailout

Cypriot legislators have approved three key bills that aim to raise enough money to qualify the country for a broader bailout package and help it stave off an impending collapse of its financial system.

A total of nine bills were approved on Friday, including a key one on restructuring the country's ailing banks, which lost billions on bad Greek debt.

Another bill is on restricting financial transactions in times of crisis and a third would set up a 'solidarity fund' into which investments and contributions will flow.

More bills to meet the total target of $7.5bn Cyprus needs to secure an international $13bn bailout will be brought for a vote over the weekend.

They include a crucial one that would impose a tax of less than 1 percent on all bank deposits, said Averof Neophytou, deputy head of the governing DISY party.

"We are voting for the least worst option," Neophytou said in a speech. "We owe an apology to the Cypriot people because we all share in the responsibility of bringing this place to this state."

Approval of the tax would come just days after parliament decisively turned down a plan that would have seized up to 10 percent of people's bank deposits.

The plan triggered an outcry from people who condemned it as an unfair grab of their life savings.

Politicians said it would cause irreparable damage to the country's financial centre status.

Ordinary Cypriots say they would willingly sacrifice a portion of their savings to save the country - just as long as somebody does not impose it on them.

"If we have Europe's support so our banks won't collapse, I wouldn't have a problem with a deposit tax," said pensioner Demetrakis Papanicolaou, 64.

"But we need to hear this not only from our government, but from the Europeans."

Cyprus' president, Nicos Anastasiades, will travel to Brussels on Saturday to present the revised package to the country's prospective creditors, its fellow countries that use the euro currency and the International Monetary Fund. There has been no indication yet that they will accept it.

Cyprus has been told to raise 5.8bn euros to qualify for 10bn euros in rescue loans from the eurozone and the IMF.

Passage of the bills allows Cyprus to ward off an impending collapse of its financial system as it faces a pressing Monday deadline, when the European Central Bank has said it will stop providing emergency funding to the country's banks if a new plan is not in place.

Without the ECB's support, Cypriot banks would collapse on Tuesday, pushing the country towards bankruptcy and a potential exit from the 17-country eurozone.

But eurozone officials said they had still not seen all the details and would have to discuss whatever final plan Cyprus presents.

Government spokesman Christos Stylianides said there had been "consultations all day" with representatives of the IMF, European Central Bank and European Commission - collectively known as the troika - who monitor and vet adherence to bailout conditions.