Cyprus bailout shakes Eurozone, Asian markets fall

The Cyprus bailout plan fuels fears of an escalation of the eurozone debt crisis.
The European Union and the International Monetary Fund want bank depositors in Cyprus to share in the cost of the latest bailout worth 10 billion euros. This is the first time the 17-nation eurozone allowed the use of people’s savings to finance a bailout.
EU leaders want a 6.75 percent tax on bank customers with less than 100,000 euros and a 9.9% tax on those with more than 100,000 euros. The plan though has yet to be finalized. News of the deal cause a rush to cash machines as people tried to withdraw their money. Economists warn the psychological consequence of such a shock could lead to a bank run and an economic collapse. Asian markets fall after news of the Cyprus bailout plans. Japan’s Nikkei 225 index falls 1.9%, Australia’s ASX 200 goes down 1.4% and South Korea’s Kospi dips 0.4%.

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