Cyprus has dropped a controversial levy on bank savings below 20-thousand Euro, sparking a warning by the central bank governor that the crucial Eurozone bailout deal was now in danger of collapse.
The warning comes as International Monetary Fund chief Christine Lagarde urged Cyprus to meet its commitments under the 10-billion-euro deal sealed with Eurozone partners at the weekend.
The revised plan sees a one-time levy being dropped on bank savings below 20-thousand Euro, but retained at 6.75 percent on deposits of 20-thousand to 100-thousand Euro and at 9.9 percent for amounts above 100-thousand.
The Cypriot Central Bank says the tax, which was originally to have applied to all bank deposits "will not yield the estimated 5.8 billion Euro agreed by the Eurogroup".
