Government prevented haircut on EU funds for Cyprus

Minister of Communication and Works has expressed satisfaction with the fact that the government has prevented any possibility of a haircut on European funds, which aim to implement projects co-financed by the EU and the government in Cyprus.

Minister Tasos Mitsopoulos noted that following coordinated efforts of the government, a haircut on EU funds was averted, adding that this development ensures the smooth flow of resources from European funds to Cyprus, but also the continuation of the projects underway.

The announcement was made after the Eurogroup’s decision to impose a haircut of around 40% on deposits over 100.000 euro at Cyprus’ largest bank, Bank of Cyprus. Cyprus’ second largest bank, Laiki Bank, will be resolved in a good and bad bank immediately – with full contribution of equity shareholders, bond holders and uninsured depositors – based on a decision by the Central Bank of Cyprus, using the newly adopted Bank Resolution Framework. Laiki deposits of up to 100.000 euro are guaranteed.