NICOSIA/ATHENS Euro zone ministers urged Cyprus to let smaller savers escape a levy on bank deposits, before a parliamentary vote on Tuesday that will either secure the island's financial rescue or threaten default. 
 
 A weekend announcement that Cyprus would impose a levy on bank accounts as part of a 10 billion euro ($13 billion) bailout by the European Union broke with previous practice that depositors' savings were sacrosanct. 
 
 The euro and stock markets fell on concern that developments in tiny Cyprus could reignite the financial crisis in the 17-nation euro zone, while angry Cypriots staged protests outside their heavily guarded parliament. 
 
 Before Tuesday's vote, which is too close to call and would send reverberations across the currency area if lost, euro zone finance ministers held an evening teleconference and said depositors with less than 100,000 euros should be protected, officials said. 
 
 Under the deal struck in Brussels on Saturday, bank deposits under that level would have faced a levy of 6.7 percent, ripping up the protection savers thought they enjoyed on insured deposits up to that limit, while those above would be stung for 9.9 percent. 
 
 The finance ministers said they favored a higher, 15.6 percent hit for richer savers, so more modest accounts could be spared. 
 
 That would look similar to a deal the Cypriots, fearing the destruction of their banking model which lures money from rich Russians and others, baulked at in Brussels at the weekend. 
 
 It was not clear if Nicosia will accept it now but if it does, it would still raise 5.8 billion euros from the bank levy as planned, a Greek finance ministry source said. 
 
 "All Eurogroup ministers said today they wished there was no tax below 100,000 euros but you can't force a country to not do that," the Greek source told Reuters. 
 
 "Cyprus doesn't want to impose a large tax above 100,000 because the money will flow out. Two thirds of deposits are from abroad." 
 
 The decision to target bank accounts stunned Cypriots, and police sealed off parliament as about 400 people staged a noisy protest outside, aggrieved that their small island of one million people should be singled out for such treatment. 
 
 Demonstrators honked horns and waved placards reading "Hang the Banksters, Hands off People's Savings" and "Merkel go home and stay". 
 
 Residents emptied cash machines over the weekend and investors feared a precedent had been set that could reignite turmoil in the single currency area that the European Central Bank has calmed in recent months with its pledge to do whatever it takes to save the euro. 
 
 The parliamentary speaker said debate on the bank levy would be delayed until 1600 GMT (11 a.m. EST) on Tuesday to buy more time to build consensus. Banks, shut on Monday for a bank holiday, will remain closed on Tuesday and Wednesday to avert any panic. 
 
 The Greek source said the vote would go ahead on Tuesday as planned. 
 
 CHANGE COMING 
 
 The euro zone had already indicated changes would be acceptable as long as the return of around six billion euros was maintained. 
 
 "It is up to the government alone to decide if it wants to change the structure," European Central Bank policymaker Joerg Asmussen, who was pivotal in the weekend negotiations, told reporters in Berlin. "The important thing is that the financial contribution of 5.8 billion euros remains." 
 
 On the streets of Nicosia, ordinary Cypriots blamed European leaders, especially German Chancellor Angela Merkel. Protesters had inked the word "No" on the palms of their hands. "Europe is for its people and not for Germany," one placard said. 
 
 "They are treating us like guinea pigs," said Takis Georgiou, 49. "The government has lost its credibility in the eyes of the people. We'd be better off leaving the euro and returning to the pound, we don't want to end up like Greece." 
 
 On markets, the euro fell before recovering some losses. European stocks dropped two percent before recouping most of the lost ground - denoting only modest levels of concern - with banks taking the heaviest blow. 
 
 Approval in Cyprus's 56-member parliament is far from a given: no party has an absolute majority and three parties say outright they will not back the tax. 
 
 "The most important question is what would happen the following day if the bill isn't voted," Cyprus central bank governor Panicos Demetriades told parliament. 
 
 "What would certainly happen is that our two big banks would need to be consolidated. This doesn't mean that they would be completely destroyed. We will aim for this to happen in a completely orderly way." 
 
 ONE-OFF 
 
 Brussels has emphasized that the measure is a one-off for a country that accounts for just 0.2 percent of European output. 
 
 The worst fear is that savers in other, larger European countries become nervous and start withdrawing funds, although there was no immediate sign of that on Monday. 
 
 "If I were a saver, certainly in Spain or maybe Italy, I think I'd be looking askance at these measures and think this could yet happen to me," said Peter Dixon, global financial economist at Commerzbank. 
 
 U.S. Treasury Secretary Jack Lew, who has talked with his EU counterparts, was monitoring developments closely and expected a "fair" solution, Washington said. 
 
 Cyprus's banking sector dwarfs the size of its economy and has been severely hurt by exposure to its much larger neighbor Greece. 
 
 Moscow is considering extending an existing 2.5 billion euro loan to help bail the island out and said the fact it had not been consulted about the bailout could come into play. 
 
 "We will consider the issue of restructuring of the loan taking into account our (future) participation in the coordinated actions with the European Union to help Cyprus," Russian Finance Minister Anton Siluanov told Reuters. 
 
 President Vladimir Putin criticized the bank levy as setting a dangerous precedent. 
 
 "Putin said that such a decision, should it be made, would be unfair, unprofessional and dangerous," Kremlin spokesman Dmitry Peskov told reporters. 
 
 Cypriot President Nicos Anastasiades, a conservative elected just three weeks ago, said in a TV address that the tax was an alternative to a disorderly bankruptcy. It was painful, but "will eventually stabilize the economy and lead it to recovery". 
 
 But many legislators remain unconvinced. 
 
 "Essentially parliament is called to legalize a decision to rob depositors blind, against every written and unwritten law," said Yiannakis Omirou, speaker of parliament and head of EDEK, the small Socialist party. "We refuse to subscribe to this." ($1 = 0.7654 euros) 
 
 (Additional reporting by Jan Strupczewski, Karolina Tagaris, Annika Breidthardt, Jan Strupczewski, John O'Donnell, Mike Shields and Reuters Moscow Bureau.; Writing by Mike Peacock, editing by Janet McBride and Giles Elgood) ||||| The latest European bailout is blowing up. 
 
 Two days after the European Union revealed a €10 billion rescue for Cyprus, the tiny island nation said its banks would not reopen at least until Thursday to give it more time to win the backing of parliament for a controversial tax on deposits. 
 
 The unprecedented tax on bank deposits led to a run on cash machines in Cyprus over the weekend. It also spooked investors, who feared that other weak eurozone states could eventually be forced down the same path, despite EU statements to the contrary. 
 
 Shares across the region fell Monday, and banks were hit particularly hard. The prices of government bonds across southern Europe also fell, pushing up yields. There were no signs of bank runs in other European countries, including Italy and Spain. 
 
 "The contagion from Cyprus is fairly limited but there is a tail risk that this measure could backfire," wrote Berenberg Bank analysts in a note. 
 
 As part of the plan to rescue Cyprus' outsized banking sector and head off national default, the EU said deposits of more than €100,000 would be subject to a one-off levy of 9.9%. Smaller depositors would be subject to a levy of 6.75%. 
 
 It was the first time that the EU has insisted on such terms for bank depositors as part of a bailout. The EU's bailouts of other nations, such as Greece, have been accompanied by strict budget restrictions and led to losses for bond holders and shareholders. 
 
 Related: 5 reasons why Cyprus bailout matters 
 
 Parliament had been due to vote on the plan Monday -- a bank holiday in Cyprus -- with the tax due to take effect Tuesday. But officials were working on changes to the proposals to force richer savers to bear a bigger share of the cost, reducing the burden on those with less than €100,000 in deposits. 
 
 The speaker of the parliament confirmed that the debate had been delayed until Tuesday, with a vote tentatively scheduled for midday ET. 
 
 After an emergency meeting on Monday, eurozone officials generally stuck to their guns. The reform plan approved on Saturday "is the best guarantee for a more prosperous future for Cyprus and its citizens," EU officials said. 
 
 The EU officials also said they would endorse a change to the original bailout plan that shielded small bank customers more than the proposal. 
 
 Either way, analysts said the levy set a dangerous precedent and could undermine depositors' belief that their savings are safe. 
 
 "The Cyprus deal may prompt Europeans to question that," wrote financial markets analyst and blogger Louise Cooper. "A fundamental safeguard to Europe's banking industry has been compromised for a tiny country costing 10-20 billion euros to bailout -- not a good trade." 
 
 The bailout, while small compared to the emergency loans supporting other troubled European nations like Greece, represents more than half the size of the €18 billion Cyprus economy. Cyprus is the third smallest economy in the eurozone, bigger only than Malta and Estonia. 
 
 The problem is its banking sector, which is several times the size of the economy. The country made a formal request for help last June after its banks were decimated by losses on Greek debt -- losses that caused lending to stall and sent the economy into a deep recession. 
 
 Negotiations on a bailout stalled last year after a previous government objected to the conditions that international lenders were looking to attach. They restarted following the election of President Nicos Anastasiades last month. 
 
 Related: Europe financial sector is fragile, says IMF 
 
 EU concerns about money laundering also hampered progress on a bailout. Cypriot banks have large volumes of international deposits, with Russian businesses believed to hold about $19 billion, according to ratings agency Moody's. As part of the bailout deal, Cyprus has agreed to an international anti-money laundering audit. 
 
 Russia has come to Cyprus' aid in the past, providing a €2.5 billion loan in 2011 to shore up government finances, but its participation in the new rescue was looking uncertain Monday after President Vladimir Putin attacked the tax on bank deposits. 
 
 "If such a decision was made, it would be unfair, unprofessional and dangerous," Putin spokesman Dmitry Peskov was quoted as saying. 
 
 In addition, a finance ministry spokesman said Russia was reviewing its position after not being consulted on the decision to impose the levy. 
 
 The International Monetary Fund was expected to contribute to the deal as it has in others. Christine Lagarde, the fund's managing director, said Saturday that she supports the terms and would recommend that the IMF help provide financing for it. 
 
 In addition to the tax on bank deposits, other conditions for the bailout loans include an overhaul of the financial sector and an increase in corporate taxes. 
 
 Cyprus is the fourth of 17 eurozone states to be granted a bailout by its EU partners and the IMF, after Greece, Ireland and Portugal. Spain has been given EU assistance to rescue its banks, but has so far avoided asking for a full sovereign bailout. 
 
 -- CNN's Elinda Labropoulou and Charlie Charalambous contributed to this article. ||||| Media playback is unsupported on your device Media caption Sue Hall runs a wedding business in Cyprus: "Most of the money in my business deposit account belongs to couples who are to get married" 
 
 A crucial vote in Cyprus' parliament on a bailout that has sparked huge public anger has been delayed until Tuesday. 
 
 President Nicos Anastasiades has been meeting MPs in Nicosia and has indicated he wants the terms amended. 
 
 The 10bn-euro ($13bn; £8.6bn) bailout agreed with the EU and IMF had demanded that all bank customers pay a one-off levy and led to heavy cash withdrawals. 
 
 The president's party has 20 seats in the 56-member assembly and needs other parties' support to ratify the deal. 
 
 Asian and European stock markets fell amid uncertainty in Monday's trading. 
 
 If Cyprus' president wants to change something regarding the levy on bank deposits, that's in his hands Joerg Asmussen, European Central Bank governing council Q&A: Cyprus bailoutRussian anger at levy 
 
 Meanwhile, Russian President Vladimir Putin on Monday called the proposed levy "unfair, unprofessional and dangerous", his spokesman said. Russian banks and businesses have significant deposits in Cyprus. 
 
 'People betrayed' 
 
 The debate and vote in Cyprus' parliament has now been postponed until 18:00 local time (16:00 GMT) on Tuesday. It was initially to have been held on Sunday. 
 
 President Anastasiades is at present holding talks with ministers and lawmakers at the parliament building in Nicosia, which has been cordoned off to prevent protests. 
 
 The BBC's Mark Lowen, in Nicosia, says there are suggestions Mr Anastasiades is looking at lowering the cost to those with smaller savings. 
 
 Under the currently agreed terms, depositors with less than 100,000 euros in Cyprus accounts would have to pay a one-time tax of 6.75%. Those with sums over that threshold would pay 9.9%. 
 
 Analysis Reform of how to mend broken banks, which has been negotiated globally and in Europe since the crash of 2007-8, has been based on two central principles. First, that the savings of ordinary people should be protected, up to a high threshold - or 100,000 euros in the European Union for example. And that financial institutions which lend to banks by buying their bonds should incur losses when banks are bailed out: bondholders should, to use the jargon, be bailed in, as part of resolution plans. So what is seen by many as profoundly shocking about the terms of the rescue of Cyprus by the rest of the eurozone and the International Monetary Fund is that both of these principles have been broken. Join Robert for a Twitter Q&A 16:00-1630 GMT 
 
 Our correspondent says the president may want to lower the former rate to 3%, while raising the levy on the larger depositors to 12.5%. 
 
 An EU source told Agence France-Presse there could be a three-way split on the level of levy, grouped into accounts holding less than 100,000 euros, between 100,000 and 500,000 and more than 500,000. 
 
 Joerg Asmussen, a member of the European Central Bank's governing council, said there could be a change to the deal. 
 
 He said: "It's the Cyprus government's adjustment programme. If Cyprus' president wants to change something regarding the levy on bank deposits, that's in his hands. He must just make sure that the financing is intact." 
 
 German government spokesman Steffen Seibert echoed his comments, saying: "How the country makes its contribution, how it makes the payments, is up to the Cyprus government." 
 
 Mr Anastasiades insists that without the bailout Cyprus could face bankruptcy and a possible exit from the eurozone. 
 
 He said on TV on Sunday: "I fully share the unhappiness caused by a difficult and painful decision." 
 
 He also said it was the worst crisis since Turkey invaded in 1974. 
 
 The banks are closed on Monday for a national holiday and could remain shut on Tuesday to avoid mass withdrawals. 
 
 Opposition leader George Lillikas, an independent, said the president had "betrayed the people's vote". 
 
 Russian capital 
 
 Under the bailout's current terms, depositors will be compensated with the equivalent amount in shares in their banks, and Mr Anastasiades promised that those who kept deposits in Cypriot banks for the next two years would be given bonds linked to revenues from natural gas. 
 
 Cyprus announced the discovery of a field containing between 5 and 8 trillion cubic feet of natural gas under the Mediterranean Sea in 2011 but Turkey disputes its drilling rights. 
 
 Reports have suggested that eurozone leaders, particularly in Germany, insisted on the levy because of the large amount of Russian capital kept in Cypriot banks, amid fears of money-laundering. 
 
 However, German Finance Minister Wolfgang Schaeuble said he and the International Monetary Fund had been in favour of "respecting the deposit guarantee for accounts up to 100,000" euros. 
 
 He said it was the Cypriot government, the European Commission and the European Central Bank that had decided on the levy terms and that "they now must explain this to the Cypriot people". 
 
 Russian presidential spokesman Dmitry Peskov said on Monday: "Assessing the possible decision of imposing additional tax by Cyprus on deposits, [President] Putin said that this decision, if taken, would be unfair, unprofessional and dangerous." 
 
 Unprecedented levy Depositors with under 100,000 euros deposited must pay 6.75% 
 
 Those with more than 100,000 in their accounts must pay 9.9% 
 
 Depositors will be compensated with the equivalent amount in shares in their banks 
 
 The levy is a one-off measure Cyprus bailout - Your stories UK to help troops 
 
 Prime Minister Dmitry Medvedev said: "It looks simply like the confiscation of other people's money." 
 
 The Moody's ratings agency estimates that, at the end of 2012, Russian banks had placed $12bn in Cypriot banks, with corporate deposits at $19bn. So Russian corporate and individual investors could lose up to $2bn. 
 
 The Russian government also gave Cyprus a 2.5bn euro loan in 2011. Russian Finance Minister Anton Siluanov told the Interfax news agency on Monday that Moscow would consider extending the loan period and restructuring the repayments. 
 
 The proposed savings levy has drawn criticism from economic analysts. Michael Hewson, of CMC Markets, told the Press Association: "If European policymakers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job." 
 
 It is clear that negotiators of the bailout in Brussels drastically underestimated the reaction in Cyprus, says our correspondent, Mark Lowen. 
 
 Media playback is unsupported on your device Media caption Renaissance Capital's Ivan Tchakarov: "Russians are not happy about the bailout levy" 
 
 A tiny eurozone economy feels it is being blackmailed by the most powerful, and the growing resentment will do nothing to foster European solidarity, he adds. 
 
 If the levy goes ahead, it will affect many non-Cypriots with bank accounts, including UK expatriates. 
 
 However, depositors in the overseas arms of Cypriot banks will not be hit. Bank of Cyprus UK and Laiki Bank UK both confirmed on their websites that there would be no impact. 
 
 Chancellor George Osborne said the UK would compensate any government employees and military personnel whose bank accounts were affected. ||||| Lawmakers in Cyprus are still scrambling for a way to raise (EURO)5.8 billion ($7.5 billion) to help pay for an international bailout of the country's banks and government. 
 
 Protesters who wrote "NO" on their hands protesting outside of the parliament in capital Nicosia, Cyprus, Monday, March 18, 2013. A vote on a bailout package for Cyprus that includes an immediate tax... (Associated Press) 
 
 A plan to seize up to 10 percent of people's savings has been met with fury and it has raised concern, if not panic, in the rest of Europe about the security of bank deposits in times of financial turmoil. 
 
 On Tuesday, Cypriot lawmakers are scheduled to vote a revised plan that would not be so burdensome for people with less than (EURO)100,000 in the bank. Any plan must be approved by the other eurozone countries, which would then commit (EURO)10 billion in rescue loans to Cyprus. 
 
 Banks in Cyprus will remain shut until Thursday to give political leaders time to hash out a deal. 
 
 Here's a look at the plan and the problems it may pose. 
 
 HEY, HOW CAN THEY DO THAT? 
 
 As a member of the euro currency, Cyprus can to raise or lower taxes whenever it wants. It isn't the first time that a eurozone nation has raised taxes to cope with mounting debt and to prop up struggling banks. Residents of Greece, Portugal and Ireland _ all bailout recipients _ have seen their tax bills skyrocket in recent years as those countries tried to reduce their debts. But Cyprus is charting new ground here, and there could be legal _ and political _ challenges. 
 
 AND HOW EXACTLY WILL IT WORK? 
 
 Banks have already acted to seal off the amount of the levy _ a 6.75 percent tax on deposits under (EURO)100,000 and 9.9 percent on those above _ so depositors can't access it. Banks will remain closed until Thursday to avoid a rush of withdrawals while lawmakers finalize the move. They will vote on Tuesday, but some are seeking modifications, mainly to lower the tax rate on deposits under (EURO)100,000. To do that, however, they have to raise the rate for the larger depositors, since the overall scheme has to raise a total of (EURO)5.8 billion. 
 
 HAS THIS EVER HAPPENED BEFORE? 
 
 So far in the euro crisis, depositors have been protected. But European countries have taxed bank deposits before. In the 1990s, Italy levied a tax on every bank account to stave off the collapse of its lire currency. The rate, however, was miniscule _ 0.06 percent _ compared to what Cyprus is enacting. Iceland _ another island with an outsized financial sector, although worse weather _ also relied on depositors to prop up its banks. When the crisis hit there in 2008, Iceland protected its domestic deposits but reneged on deposit insurance for overseas, Internet-based accounts held by British and Dutch. Those two governments stepped in to help their citizens to the tune of $5 billion. The U.K. and the Netherlands sued Iceland unsuccessfully in a European court to get their money back, but Iceland has nevertheless started to repay some of that money. 
 
 European officials are promising this Cyprus is a unique case, and they are right in one aspect: Cypriot banks are overwhelmingly funded by deposits, not bondholders. So it wouldn't have been very fruitful to go after bondholders. 
 
 WHO IS AFFECTED? 
 
 All people with money in Cypriot banks _ except those with money in Greek branches, which will be sold to Greek banks. EU and IMF creditors clearly wanted to protect struggling Greece, but perhaps also saw that Greece is the most likely place in the eurozone for a bank run. Protecting depositors there minimizes that possibility. Of the more than (EURO)68 billion on deposit in Cypriot banks, foreigners hold about 40 percent _ and most of those are Russians. Cyprus could have only gone after non-EU depositors, but it may have been hard to distinguish between Cypriot and Russian savers, said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics in Washington. That is because many Russians have dual citizenship and many Russian businesses are registered on the island. Kirkegaard said Cypriots may paradoxically welcome this measure since the government just managed to widen its tax base to include a lot of Russians; the taxes levied in Greece, Portugal and Ireland were for residents alone to shoulder. 
 
 WHY DID CYPRUS NEED A BAILOUT? 
 
 Cyprus built its economy in recent years by becoming a financial center, much the way Ireland and Iceland before it did. Its banks offered Internet accounts to foreigners, were renowned for their service, provided substantial privacy to clients and had very low taxes. It worked so well that Cyprus' banking industry ballooned to nearly eight times the country's gross domestic product at the height of the boom. In December, it was still more than seven times Cyprus' (EURO)17.5 billion GDP. Russians _ looking for warmer climes, lower tax rates and shared culture in the form of Orthodox Christianity _ are thought to hold the majority of those accounts, with about (EURO)20 billion in the island's banks. 
 
 But Cyprus' banks held a lot of Greek debt and suffered significant losses when they took a writedown of those bonds as part of the Greek bailout. Much of Cyprus' bailout money will be used to recapitalize Cypriot banks to prevent them from collapsing. Like other eurozone countries, Cyprus has also seen its deficit and debt explode as growth has ground to a halt. And with the banking system so large, the government wouldn't have been able to bail it out even in a healthy economy. 
 
 WHY DO RUSSIANS KEEP SO MUCH MONEY IN CYPRUS? 
 
 Russian businessmen have preferred to place their savings in offshore jurisdictions, partly to escape political uncertainty and corruption in Russia. Cyprus offers a 10 percent corporate tax rate and relatively stable political situation. Cyprus is also believed to be a top destination for money-laundering. It is much safer for a corrupt Russian official to keep proceeds from illegal activities abroad, hiding information about their fortunes and holdings away from the prying eyes of Russian banking regulators. Russian officials estimated that about $49 billion, which is equivalent to 2.5 percent of Russia's gross domestic product, was wired to foreign accounts illegally last year. 
 
 WHAT HAS THE MARKET REACTION BEEN? 
 
 Stock markets and the euro dropped on Monday but not too much. Kirkegaard says that the decision to tap depositors indicates that the European Central Bank is confident that the risk of a bank run elsewhere in the eurozone is low _ and by excluding Greek branches of Cypriot banks, they have reduced the possibility even further. 
 
 But Heather Conley, director of Europe program for the Center for Strategic and International Studies, says it's hard to know the far-reaching implications of this one-off deal. The "exceptions" created to solve Europe's debt crisis are adding up, she said. And some investors may look at this late-night, three-day-weekend deal and see what she saw: a dress rehearsal for a country dropping out of the euro. 
 
 ___ 
 
 AP Writer Menelaos Hadjicostis contributed to this report from Nicosia, Cyprus.
– The proposed bank deposit tax that has enraged Cypriots and spooked bank customers across Europe looks likely to die today, even with a last-minute tweak that would spare the smallest savers, Reuters reports. Draft legislation sent to parliament amends the previous plan by exempting accounts containing less than about $26,000 from the tax, reports the Wall Street Journal. The other levies—6.75% on all deposits under $131,000 and 9.9% over that amount—would not be raised to make up for the lost revenue, meaning the levy wouldn't generate the $7.6 billion required by the IMF and eurozone partners, notes Reuters. Still, a government rep says parliament remains unlikely to pass the levy even with the change, and could punt on a vote if it becomes clear there's no chance of passage. Meanwhile, the island's banks will not reopen until Thursday at the earliest, CNN reports. EU officials insist that there is no chance of a similar levy being imposed on other nations, but the Cyprus mess has raised fears of bank runs in other countries. "If you're a small depositor in Cyprus, you'll tell yourself that it would have been better to keep your money under the carpet than in a bank," says a French bank executive. "And if you're a Greek, a Spaniard, or an Italian, well, you'll tell yourself that you might be next." This isn't the first time European countries have moved to tax bank deposits, the AP adds. Italy imposed a tax on all bank accounts to keep its currency afloat in the '90s, but the rate was just 0.06%.