UK government says it will compensate British troops in Cyprus hit by bailout levy

LONDON – Britain’s Treasury chief says the government will compensate U.K. troops who lose money to Cyprus’s bailout tax.

About 3,500 British military personnel are based in Cyprus, which has announced a levy of 6.75 to 9.9 per cent on all bank balances as part of a deal with creditors for €10 billion ($13 billion) in rescue money.

The announcement sent Cypriot depositors rushing to ATM machines to drain their accounts.

British Chancellor of the Exchequer George Osborne said Sunday that the government would compensate troops and civil servants affected by the bank levy. He said “anyone doing their duty for our country in Cyprus will be protected.”

But those among the 59,000 British residents of Cyprus not working for the U.K. military or government could still be out of pocket.