Rejection of Deposit Tax Scuttles Deal on Bailout for Cyprus – Part 4
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Lawmakers rejected a 10 billion euro bailout package on Tuesday, sending the president back to the drawing board to devise a new plan that might still enable the country to receive a financial lifeline while avoiding a default that could reignite the euro crisis.

The bailout package, which would have set an extraordinary precedent by taxing ordinary depositors to pay part of the bill, led to street protests in this tiny Mediterranean country and set off a wave of anxiety across Europe.

As hundreds of demonstrators gathered outside Parliament chanting antigovernment slogans, lawmakers voted 36 against with 19 abstaining, arguing that it would be unacceptable to take money from account holders. One member who was out of the country did not vote.

Protesters angry at what they saw as a dictate by Germany to enforce harsh bailout terms wielded unflattering posters of Chancellor Angela Merkel, a day after one climbed to the roof of German Embassy and threw down the German flag.

The German finance minister, Wolfgang Schäuble, said Germany “regretted” the vote in Cyprus, but insisted the public outcry “cannot lead us to make an irrational, unsustainable decision.”

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from The New York Times,