Cyprus bailout sparks new round of economic turmoil in Europe

Top news: With the decision to require Cypriot depositors to pay for a bailout of the country's ailing banking sector, European regulators may have set off a new phase in the eurozone crisis as outrage mounted over the weekend against the plan and some analysts warned that a run on Cyprus' banks may spread to Italy and Spain.
In Cyprus, political support for the 1 billion euro bailout package is now crumbling. The Cypriot parliament has delayed a key vote to approve the measure after people flocked to ATMs over the weekend to remove cash from their accounts before the tax was implemented. Under the terms of the current deal, accounts with under 100,000 euros would be taxed at a rate of 6.75 percent and accounts over 100,000 at a rate of 9.9 percent. Cyprus' president, Nicos Anastasiades, tried to to sell his country on the deal, which was largely forced on him by European financial mandarins, in an address to the nation, arguing that without the deal the country's financial system would completely collapse, the economy would be crippled, and the country would likely exit the eurozone.
Under previous bailouts, bond holders have been forced to take losses on their holdings in order to finance loan packages, but individual depositors have so far been exempt from having their savings raided to bail out banks. The reversal of that policy has led to fears that depositors in Spain and Italy may move quickly to remove their savings from banks, a move that would devastate those countries' financial systems. The new policy is the result of two main factors: Germany's unwillingness to finance further bailouts out of its own pocket and the presence in the Cypriot banking system of large deposits held by Russians, who have taken advantage of the country's lax banking rules to park their money there. Russian President Vladimir Putin slammed the measure, calling it " "unfair, unprofessional and dangerous."
Anastasiades is now attempting to renogotiate the terms fo the deal to shift the rate at which deposits would be taxed to more heavily affect larger deposits, a move that would place the burden more heavily on the large foreign deposits which currently reside in Cypriot banks.
China: Speaking on the final day of the People's National Congress, China's new prime minister, Li Keqiang, presented a reformist vision for his country's future, arguing that growth must occur within the parameters of environmental protection.

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Middle East With the amount of territory under its control steadily growing, the Syrian opposition is attempting to form an interim government capable of dispensing basic services. Israel released Ayman Sharawneh, a Palestinian man who has been on a hunger strike for several months, in a deal that will require him to be confined to Gaza for the next 10 years. Days ahead of the 10th anniversary of the U.S. invasion of Iraq, a car bomb struck just north of the southern city of Basra, killing at least 10 and wounding several others. Asia Afghan opposition politicians have opened negotiations with the Taliban ahead of next year's election, which will determine the sucessor to Hamid Karzai. Five men were arrested in connection with the gang rape of a 39-year-old Swiss woman travelling by bicycle through central India together with her husband. When the clock hit midnight on Saturday, Pakistan's government became the first in the country's history to serve out its full term, a crucial milestone for a democracy with a history of coups and instability. Europe A top Russian diplomat said that the United States' decision to move parts of its missile defense system out of Europe did not address Russia's concerns on the issue. Britain's three main political partise reached an agreement over how to regulate the British press, an initiative put forward after revelations of wide-spread phone hacking. The Italian parliament elected speakers in both its houses, but it is likely Italians will have to return to the polls in order for a government to be put in place. Africa One day after a referendum on the country's new constitution, Zimbabwean security forces arrested three prominent opposition politicians and a renowned human rights lawyer. Prime Minister Raila Odinga filed a brief with Kenya's supreme court to overturn the decision that handed a narrow victory to Uhuru Kenyatta in the recent presidential elections. A massive car bomb struck the center of Somalia's capital, Mogadishu, killing at least 8 with casualties expected to rise. Americas Lima's first elected female mayor, who has launched an effort to tackle corruption in the city, will likely survive a recall vote, according to exit polls. Venezuelan opposition politician Henrique Capriles launched a nation-wide tour as part of his effort to unseat Hugo Chavez's chosen successor, Nicolas Maduro. A fireworks explosion in rural Mexico during a religious procession killed at least 17 people.

-By Elias Groll