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Cyprus Finance Minister: We Hope People Will Believe Us

Deepanshu Bagchee; Reported By: Julia Chatterly
Cyprus Finance Minister: Levy Was Best Option

Cyprus Finance Minister Michael Sarris told CNBC that there will be no capital restrictions and that people will be able to move their money out of the country on Tuesday after banks re-open.

The Cyprus government announced a bank holiday on Monday and temporary halted all electronic bank transfers after imposed a levy of as much as 10 percent on bank deposits. The levy is due to go into effect on Tuesday.

Sarris's assurance is likely to be tested with some over the weekend.

"Absolutely, there is no capital restrictions, people can move. We hope people will believe us, believe the collective leadership of the European Union, that this was a necessary step, but a single shot at the problem, and that from now on they can be very confident that nothing will happen to their savings," Sarris said in Brussels.

People withdraw money from an ATM in the Cypriot capital Nicosia. The Cyprus government postponed a planned emergency session of parliament on Sunday to debate a controversial EU bailout.
Photographer | Collection | Getty Images

Sarris had previously insisted that any bank bailout would not include confiscation of deposits. Under the deal agreed to on Saturday, savers will get equity in the bank in return for a levy of 9.9 percent on accounts above 100,000 euros and 6.75 percent on accounts below that.

(Read More: Cyprus Bailout 'Disaster' Risks New Euro Crisis)

"What we did to accept is an exchange of a relatively small part of somebody's deposit, once and for all, with shares in an institution," Sarris said. "This is not a very agreeable outcome for sure, but it compares well with much more serious and grave proposals that were on the table."

But the bailout deal has already been thrown into uncertainty after the Cyprus parliament postponed an emergency session meant to vote on the bailout. Several parties have opposed the bailout levy and the vote is now due to take place on Monday. Cyprus's president has warned that a failure to pass the deal could lead to the collapse of the country's two largest banks.

(Read More: Cyprus Parliament Postpones Session to Discuss Bank Levy)