In late June 2012, Cyprus, due to a large deficit both in the public and banking sector, applied to the European Stability Mechanism and subsequently entered into a debt restructuring programme under the supervision of the International Monetary Fund (IMF), the European Union and the European Central Bank. In March 2013 the Eurogroup decided on a haircut to two of the deposits in two of the largest banks in Cyprus. The immediate effect was that a relevant law had to be approved by the house of parliament approving the said haircut. The immediate reactions were not at all positive neither from the general public nor the house of representatives. Finally the relevant law was approved by the majority in the house of parliament.
Source: Haviaras & Philippou L.L.C.
