Cyprus troops 'will be compensated'

Politicians in Cyprus are to vote on a bank account levy which could affect the savings of thousands of British expats.

As part of a £9 billion bailout, European officials said people with less than 100,000 euro (£87,000) in Cyprus-based accounts would have to pay a one-off tax of 6.75% and those with more will lose 9.9%.%VIRTUAL-SkimlinksPromo%
Around 3,000 British military personnel and 250 civil servants will be protected should their savings be subject to the levy, the Treasury said. However, there are 59,000 British residents in Cyprus who have no such guarantee on their cash.

In a televised address on Sunday night, President Nicos Anastasiades urged politicians to approve the bailout plan, saying it was essential to save the country from bankruptcy.

But he also said he was trying to amend it to reduce its effect on small savers.

"I completely share the unpleasant sentiment that this difficult and onerous decision has caused," he said. "That's why I continue to give battle so that the decisions of the eurozone are amended in the next hours to limit the effect on small depositors."

It has been reported that the Cypriot government is discussing with lenders the possibility of changing the levy to 3% for deposits below 100,000 euros, and to 12.5% for above that sum.

Cyprus has become the fourth euro-area country to get a rescue package to save its banks that suffered significant losses because of their exposure to Greek debt.

The levy will mark the first time the IMF and the 17 eurozone nations have dipped into people's savings to finance a bailout.

While thousands of British expats wait to hear whether or not their savings will take a hit, British armed forces and civil servants have been told they will receive compensation for any financial loss. A spokeswoman for the Treasury said: "How much it will cost will be something that will be worked out over the next few days."

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