Cyprus Banks Remain Closed as Financial Crisis Continues

Government looking at grabbing pension funds

NICOSIA, Cyprus — Scrambling to placate international lenders, Cyprus late Wednesday proposed to nationalize the country's pension funds and conduct an emergency bond sale to help raise the 5.8 billion euros the indebted country needs to secure a bailout.

The proposals are meant to slash the amount of money that would be raised a controversial tax on bank deposits, as originally planned in a 10 billion euro international bailout package that the Cypriot Parliament rejected the night before.

But even the revised plan contains a bank tax, that while much smaller than originally proposed, might still not be palatable to Parliament. Under the new plan, all Cypriot bank deposits of up to 100,000 euros would be hit by a one-time tax of 2 percent. Deposits about that threshold would be subject to a 5 percent levy.