BANGKOK (AP) — Asian stock markets and the euro tumbled Monday as a plan to fund a bailout for Cyprus by taxing its bank deposits raised worries it could spark an exodus of capital from fragile European economies.
The tax is part of a rescue plan for cash-strapped Cyprus that was reached Saturday after talks among officials from countries that use the euro, the International Monetary Fund and the European Central Bank.
Japan’s Nikkei 225 index slid 2 percent to 12,312.53. Export shares slid as the yen strengthened against the dollar and the euro.
Hong Kong’s Hang Seng dropped 2.1 percent to 22,057.07. South Korea’s Kospi shed 0.6 percent to 1,974.32. Australia’s S&P/ASX 200 fell 2 percent to 5,015.60. Benchmarks in Singapore, Taiwan, mainland China and the Philippines also fell.
…About 25 lawmakers from the communist-rooted AKEL party, the socialist EDEK and the Greens said they won’t vote for the tax in the 56-seat Cypriot parliament amid deep resentment over a move some called disastrous. If Parliament rejects the tax, that would put the entire aid package in jeopardy.
…In exchange for €10 billion ($13 billion) in rescue money, creditors would impose a one-time tax of 6.75 percent on all bank deposits under €100,000 ($131,000) and 9.9 percent over that amount.
