At dawn on Monday, Cyprus and the troika of international backers (EU, ECB, IMF) reached agreement on a €10bn bailout plan, which should prevent the bankruptcy of the island and its exit from the eurozone.
The plan notably includes measures to impose levies on shares, bonds and bank deposits on the island – which should net the state €4.2bn – and the restructuring of the Cyrpiot banking sector. Deposits of more than €100,000 with the Bank of Cyprus, the country’s leading bank which has large numbers of Russian depositors, will be subject to a haircut of 30 per cent. Laiki Bank, which is the island’s second largest financial institution, will be closed down. “Banks are set to reopen on Tuesday, however, withdrawal limits will be imposed, so as to avoid a bank run,” explains the newspaper.
The new plan will not be subject to a vote by the Cypriot parliament. However, it will have to be approved by the parliaments of several Eurozone countries, including Germany.