People withdraw money from a cash-point machine in the Cypriot capital Nicosia on March 17, 2013. (Photo: AFP/Getty Images)

The world was stunned on Saturday when Cyprus announced that it planned to levy a harsh one-time tax on bank deposits as part of a bailout agreement with its European partners and the International Monetary Fund (IMF).

Nervous depositors rushed to ATM machines to drain their accounts only to find that the banks had already sealed off either 6.75% or 9.9%, depending on whether they had more or less than €100,000 in the account.

The Cypriot bailout follows those for Greece, Portugal, Ireland and the Spanish banking sector, but it's the first that dips into people's savings to finance a bailout. Analysts worry the move could roil international markets and jeopardize Europe's fragile economies.

Reuters reports that lawmakers are working to soften the blow for those with less money in the bank, changing the rates from 6.75 percent and 9.9 percent to 3.0 percent and 12.5 percent, respectively.

But regardless of whether they succeed, the move to tax private deposits has sparked controversy around the world:

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The BBC has more on the story, including interviews with irate Cypriots (video via ZeroHedge):

​The Associated Press contributed to this report.

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Related:

• Eurozone Country: Surprise! We’re Putting at Least a 6.75% Tax on Your Bank Deposits
• The Crazy Cyprus Tax Plan: What Does This Mean For the U.S. & the Rest of the World?