The plan rejected Tuesday would have left deposits under $26,000 unscathed, foisted a one-time 6.75 percent tax on deposits between $26,000 and $129,000, and taxed deposits above that at 9.9 percent.
The latest turmoil is a potent reminder of the fragility of the financial situation in Europe, where troubles at its periphery have threatened for the past three years to spread to some of its largest economies.
Cypriots have been lining up to take cash out of automated tellers as fast as the machines can be loaded, and a Monday bank holiday was extended through the end of Wednesday to prevent a broader run on deposits.
Anastasiades’s office said he would speak to German Chancellor Angela Merkel by phone Tuesday to update her on the situation in his country. The pair also spoke Monday. Anastasiades planned to hold an emergency meeting of Cypriot political leaders Wednesday morning to discuss what to do next.
Wealthy Russians have long flocked to Cyprus as an offshore banking haven, and many European officials suspect it is a hub for money laundering, a conclusion reached in a report by Germany’s foreign intelligence service that has circulated widely in Berlin.
The plan that was rejected would have forced Cyprus to abandon its guarantees on deposits of up to $130,000, a stunning new precedent in Europe’s three-year-long economic crisis. Many analysts and officials said Cyprus should have simply honored those guarantees and concentrated the burden on larger deposits. But Cyprus has been loath to imperil its status as a financial center. Cypriot Finance Minister Michalis Sarris flew to Moscow on Tuesday afternoon to talk with furious Russian leaders about the implications for their citizens’ deposits.
“They needed to make a trade-off between having any future as a financial center and appearing to be fair and progressive to their own citizens,” said Sony Kapoor, the managing director of Re-Define, a Brussels-based think tank. “I think they possibly made the wrong decision there. And that has poisoned the air.”
In rejecting the rescue plan, Cypriot lawmakers appeared to be gambling that European governments would soften their stance. But in Germany, whose Parliament must approve any bailout, lawmakers of all stripes were lining up Tuesday to oppose any concessions. Their resolve may have been bolstered by markets, which were down only modestly Tuesday despite the unease. The euro dropped 0.5 percent against the dollar, to $1.289.
Schneider reported from Washington.