Cyprus bailout - live - Telegraph Credit: AFP 09.41 Reuters editor-at-large Hugo Dixon forsees contagion hitting Italy harder than elsewhere. 09.39 Reuters has produced a neat graphic showing how the depositor levy on uninsured deposits (those above €100,000) would be affected by bringing down the tax on so-called 'insured' deposits - those under €100,000. Play with it here. 09.30 We should expect news around 2pm on how the Cypriot parliament votes on the terms of the bailout, according to reports. 09.24 Earlier (07.43) we reported German finance minister Wolfgang Schauble's claim that his government was not the driving force behind the depositor levy. But according to Greek journalist Efthimia Efthimiou, this is far from the whole story. 09.16 The initial shock has subsided on the European markets, though they are still weighed subdued. The FSTE 100 is now down 0.8pc, while Spain's IBEX and Italy's MIB are still suffering the most, down 1.92pc and 2.2pc respectively. 09.12 The Telegraph's Diplomatic Correspondent Alex Spillius explains how Cyprus was brought to its knees. Read his whole piece here. 09.05 Earlier (08.26) we mentioned Russia's potential role in supporting Cyrpus' banks, with Mr Putin branding the bailout "unfair" and "dangerous." However Russia's deputy finance minister Anton Shatalov has come out in support of the bailout, saying the plan is fair if it is imposed on interest earned on deposits. He also stoked controversy by saying he did not pity Russian businessmen, adding "I think they will not like it." Speaking to reporters on Monday morning, he said: A minimum tax rate of 7pc on the deposit and 10pc as a maximum, this is of course, big, if it is approved like this. A possible option that has been widely reported suggests a possibility of implementing a 10pc levy on the interest rate earned on the deposits. If that were to happen, that woudl not be that horrible and it would be absolutely fair. 08.53 The US dollar is not the only "safe haven" asset enjoying a boost from Cypriot bailout fears. Jitters sent gold back above $1,600 for the first time this month, while government bond yields of northern and southern European countries dramatically diverged, as is evident from the Bloomberg snapshot below. The cost of borrowing for the UK, Germany and France has fallen sharply while Italian, Portuguese and Greek bond yields shot up. 08.43 Cypriot officials are denying rumours that the government will institute an impromptu bank holiday on Tuesday should today's parliamentary vote block the bailout, according to Greek journalist Efthimia Efthimiou. 08.26 There are hopes that Russia, where many citizens hold significant bank deposits in Cyprus, will play a key role in rehabilitating the island's struggling banks. EU officials say they expect Russia to extend a €2.5bn loan to the debt-stricken government by five years until 2021, though no decision has yet been reached. Russian investors are also expected to get involved in recapitalising Cypriot banks. Vladimir Putin, president of Russia, has reportedly spoken out against the Cypriot bailout, branding it "unfair, unprofessional and dangerous." Russian banks had about $12 billion placed with Cypriot banks and corporate deposits amounted to $19 billion at the end of 2012, according to Moody's rating agency. 08.19 Returning to the currency markets, where the euro has fallen the most in 14 months against the US dollar, sliding 1.3pc to $1.2913 at 07.50am after dropping as much as 1.5pc. The 17-nation common currency also declined by the most in three weeks against the Japanese yen, down 1.8pc to 122.36 yen after falling a much as 2.8pc. 08.17 Think tank Open Europe has published a table on the different levy rates which Cyprus could charge do raise the 5.8bn the proposed plan aims to generate. 08.12 Ian Cowie, our head of personal finance, has contrasted the the Cypriot "smash and grab" bailout with Britain's "slow motion bank robbery" in his blog. Outrage about the Cyprus banks euro tax bail-out should not be allowed to obscure the fact that millions of savers in British banks have already lost much more of the real value or purchasing power of their money to prop up financial institutions closer to home. So savers of all descriptions are paying a high price for the Bank of England's strategy of maintaining negative real interest rates. Sadly for the millions of victims of this slow-motion bank robbery in Britain, it remains too complex to explain on the front page or in TV bulletins and so much more coverage will be given to a relatively small scale smash and grab with fewer victims in Cyprus. 08.06 The Telegraph's Brussels correspondent Bruno Waterfield reports that the Cypriot government wants to revise the terms of the bailout so that depositors holding up to €100,000 are charged 3pc, those with deposits between €100,000 and €500,000 face a 10pc levy and those with the largest deposits, more than €500,000, take the biggest hit at 15pc. 08.02 European markets have just opened to plummeting stock prices across the board. The FTSE 100 slumped 1.5pc, while the IBEX in Madrid tumbled 2.85pc and the MIB in Milan slid 2.78pc in early trading. Germany's DAX fell 1.4pc. 07.55 There are suggestions that the Cyprus bailout could leave small savers alone if it charged those with deposits of more than €100,000 15.4pc. 07.43 Wolfgang Schauble, German finance minister, has played down his government's influence over the bailout, saying that Berlin would have respected the EU bank deposit guarantee on small savers' insured deposits, but that the Cypriot government, the European Commission and European Central Bank decided against it. Speaking in an interview on German broadcaster ARD on Sunday, he said: It was the position of the German government and the International Monetary Fund that we must get a considerable part of the funds that are necessary for restructuring the banks from the banks owners and creditors - that means the investors. But we would obviously have respected the deposit guarantee for accounts up to 100,000. But those who did not want a bail-in were the Cypriot government, also the European Commission and the ECB, they decided on this solution and they now must explain this to the Cypriot people. Wolfgang Schauble, German finance minister 07.32 Mats Persson, Director of think tank Open Europe, warns in his blog that today's vote in the Cypriot parliament could result in the eurozone's first departure. While he concedes that the bailout is worse than "letting Cyprus sink and leave the euro," he says it is "in a league of its own," amounting to Cypriot depositors falling victim to the forthcoming German election in September. This will be a nail-biter. The parties which supported Cypriot president Nicos Anastasiades only hold 28 out of 56 MP, so not a majority. Yesterday, Anastasiades issued a stark warning: accept the bailout deal or face "a complete collapse with a possible exit from the euro." Given the huge stakes, I reckon that MPs will approve the deal, but it could be close - current voting arithmetic suggests 30 in favour and 26 against, but this is incredibly fluid. Even if the parliament does reject the package, there could still be room for further negotiation. 07.24 Benedict Brogan, The Telegraph's Deputy Editor, argues that the Cypriot bailout has "potentially dire" consequences for Chancellor George Osborne and his Budget. He was praying for not another crisis from across the Channel. The news from a small island may force him to revise what he has to say yet further, and could blow apart what recovery there might have been, with political consequences for the Tories, David Cameron, and him. Read his whole blog entry here. 07.06 More analysts are chiming in with the warning that depositors across the peripheral euro area countries will feel threatened by the Cyprus bailout deal. Lars Seier Christensen, the chief executive of Denmark's Saxo Bank, wrote: If you can do this once, you can do it again. While Mohamed El-Erian, the chief executive of Pimco, the world's largest bond investor, said: In Europe, it [the Cyprus bail-out] could well undermine the recent tranquil behaviour of depositors and creditors in other vulnerable European economies - in particular Greece, Italy, Portugal and Spain. Despite assurances from European officials that Cyprus is 'exceptional" and the measures are 'unique," this weekend's actions have increased the risk premium. Joachim Fels, the chief economist at Morgan Stanley in London, described the levy on bank deposits as: A worrying precedent with potentially systemic consequences if depositors in other periphery countries fear a similar treatment in the future. 06.58 European banks could suffer credit rating downgrades over the turmoil in Cyprus, according to Moody's. The ratings agency said the decision is negative for depositors in Europe and marks a significant step towards limiting systemic support for bank creditors in the region. Credit ratings for banks across Europe could be hit by the Cyprus bailout, according to Moody's. 06.55 Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia, has warned the move could bring about a profound shift in savers' behaviour across Europe. He told Bloomberg: From the social planning point of view and the idea of keeping depositor confidence in general, this is a terrible precedent to set. People in Europe are probably going to think hard about how much money they should put in a tin can and bury in the back yard. 06.51 There are reports the Cypriot government will instate another bank holiday on Tuesday should today's parliamentary vote fail to approve the deal. People queue to use an ATM machine outside of a Laiki Bank branch in Cyprus. Many rushed to cooperative banks after learning that the terms of a bailout deal includes a one-time levy on bank deposits. 06.47 While the Cyprus bailout is relatively small, the "levy could have wide-ranging repercussions on eurozone bank deposits in other peripheral countries, despite Cyprus... being labelled as 'unique'" Credit Agricole said. A political deadlock in Italy also weighed on euro sentiment with doubts about talks aimed at forming a government, it added. There is little to suggest a deal is in the offing with the risk skewed towards protracted negotiations and fresh elections. 06.45 Although the bailout plan has not yet been voted through by the Cypriot parliament, analysts predict market chaos on Monday. David Baran, co-CEO of asset manager Symphony Partners, told Dow Jones Newswires: Even though the bailout of Cyprus (and subsequent levy on Cypriot bank deposits) will be put to a vote, the situation could very well lead to a selloff in the euro and a more risk-off investor stance globally. But given the expectations of the new Bank of Japan leadership, the euro is likely to fall more against the dollar than against the yen. Japanese equities, despite their recent rise, are nowhere near their all-time highs as are US stocks. 06.37 However David Cumming, Standard Life's UK head of equities, has told the BBC Radio 4"s Today programme, that he did not expect there to be contagion as a result of the Cyprus deal. He added: I don't see the impact from this [in markets] lasting for more than a few days. 06.30 In the currency markets, investors fled to the US dollar, which strengthened 0.7pc against a basket of the major world currencies, in favour of the euro, which slid to a three-week low against the US currency of $1.28888. The euro is set to fall sharply against a basket of major global currencies on Monday morning. Meanwhile, investors are set to flee to the 'safe'haven' US dollar. 06.17 Stocks and commodities fell sharply in Asia overnight, with the Nikkei in Japan slumping 2.71pc and Hong Kong's Hang Seng dropping 2.12pc. European and US equity markets are all set to open down. FTSE 100 futures are down 1.93pc, and elsewhere in Europe the CAC is forecast to open down 0.74pc, the German DAX down 0.16pc, Madrid's IBEX down 0.56pc and the MIB in Milan down 0.32pc. US markets are braced for a beating too. Dow Jones futures are down 1pc, while the S&P 500 is set to open down 1.35pc from Friday's close. Asian markets - the first to react to news of the bailout - fell steeply overnight 06.00 Good morning. Investors across the world have been spooked by a radical bailout plan for Cyprus involving a raid on bank deposits held in the nation's banks, a plan Nicos Anastasiades, the island's president, has described as "painful" but "necessary." The proposal to impose an "up front one-off stability levy applicable to resident and non-resident depositors" has sparked chaos in Cyprus, where politicians are working to avoid a run on the banks after ATMs were depleted within hours of the announcement on Saturday morning, and anger across the EU. The tax is planned as a 9.9pc raid on deposits of more than €100,000 and 6.7pc on all other deposits. The Cypriot bailout follows those for Greece, Portugal, Ireland and Spanish banks, and it is the first one that dips into people's savings to finance a bailout. Analysts worry the move could roil international markets and jeopardize Europe's fragile economies. Reports emerged on Sunday evening of eleventh-hour measures by the Cypriot government - who are due to vote on the measures later today - to soften the blow on smaller savers, involving a less punishing, 3pc levy on deposits worth less than €100,000, and revising the charge on anything above that up to 12.5pc.