Faced with mounting public outrage in Cyprus and a hostile reaction from global financial markets, the Eurozone Finance Ministers have decided to ease the conditions of a bank levy for small savers, which was agreed last Saturday as part of a 10 billion-euro ($13-billion) bailout for the debt-stricken nation.

The ministers of the 17-nation euro group agreed at an emergency conference call on Monday night that small depositors on the Mediterranean island should be treated differently under the bank levy plan approved by all member-nations.

They agreed that the Cypriot Government would introduce progressivity in the one-off levy, meaning that it can shift the tax burden from savers below 1,00,000 euro level to large deposit holders.

The Finance Ministers did not specify how this could be achieved, but one proposal is to increase the levy for deposits of about 1,00,000 euros to more than 12 per cent and to introduce a tax-free threshold up to 20,000 euros.

However, the Government will have to fulfil its commitment to raise 5.8 billion euros to secure the bailout.

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