Cyprus set to vote on Plan B to secure bailout

Officials say a new Plan B would include some Russian assistance and a smaller bank deposit tax.

Earlier in the day the country’s Finance minister Michalis Sarris was in Moscow seeking help from Russia, including an extension on a loan extended in 2011.

The Cypriot Parliament had rejected a previous controversial plan, which involved seizing up to 10 percent of people’s bank deposits.

That decision meant that the country’s banks could collapse, the government would be unable to pay its bills and Cyprus could be forced out of the euro.

Amid the ongoing crisis a plane carrying one million euro (£852,600) touched down in Cyprus as part of a “contingency measure” to help British troops and their families.

The Ministry of Defence (MoD) said the RAF flight will provide people with emergency loans in the event that cash machines and debit cards stop working completely.

The MoD stressed it was determined to minimise the impact of the Cyprus banking crisis on “our people” and it will consider further shipments if required.

The aircraft, which landed at 7.50pm UK time on Tuesday, arrived just hours after the Cypriot parliament rejected a critical draft bill that would have seized part of people’s bank deposits.

Before news of a Plan B emerged it was announced yesterday that banks in Cyprus would remain closed for another two days while officials tried a solution to stave off financial ruin. The central banks’s spokeswoman Aliki Stylianou confirmed the additional two-day closure for Thursday and Friday.

As next Monday is a national bank holiday in Cyprus, it was expected that the institutions will not reopen before next Tuesday at the earliest.

The cash-strapped lenders have been closed since Saturday, when Cyprus said it would raid bank deposits to help fund its international bailout package, to avoid a bank run.

Cypriot officials have been looking for alternative ways to raise the 5.8bn euro (£4.97bn) that the country’s euro area partners and the International Monetary Fund (IMF) expect in order to loan another 10bn euro (£8.57bn).

The head of Cyprus’s influential Orthodox Church said he would put the church’s assets at the country’s disposal to help pull it out of a financial crisis.