People withdraw money from the ATM of Bank of Cyprus in the downtown of Nicosia Cyprus 24 March: photo - EPA/KATIA CHRISTODOULOU
Cyprus' second largest lender, Laiki Bank, will be wound down and the nearly 6 billion euro needed to guarantee the 10 billion euro bailout to stop the island's financial system from going into meltdown and the country thrown out of the eurozone, will be raised from savers with over 100,000 euros in accounts.
The deal avoids having to levy accounts with under 100,000 euros, a move which angered Cypriots and was rejected by parliament in Nicosia when it was announced earlier in March.
The current deal agreed in Brussels on Sunday does not require a vote in the Cypriot parliament, which unanimously rejected the previous package.
Cypriots are not the only ones angered by the current dire situation on the island, which has seen its banks closed since last week.
Robert Zientara, who owns a Polish food shop in Cyprus, told the TVN 24 news station: “I believed that the European Union would help small businesses, but it turns out that nothing like this has happened”.
According to Zientara, the situation in the country continues to deteriorate, with strikes, more expensive electricity bills, and “people do not have enough money to pay the bills.
“For two years, we have lived with permanent stress,” Zientara said.
A top level source involved in the talks has told the Reuters news agency that President Anastasiades threatened to resign at one stage if he was pushed too far by the 'troika' of IMF, EU and European Central Bank during difficult negotiations at the weekend.
The EU's economic affairs chief Olli Rehn said earlier there were no good options but "only hard choices left" for the latest casualty of the eurozone crisis.
With banks closed for the last week, the Central Bank of Cyprus imposed a 100-euros per day limit on withdrawals from cash machines at the two biggest banks to avert a run.
The Polish ambassador told Polish Radio last week that even his embassy's bank account had been blocked. (pg)