Depositors and bondholders who suffered losses during Cyprus’s 2013 banking crisis could receive significantly less compensation this year than in 2025, under new Finance Ministry plans that have sparked renewed concern among those affected.
A critical meeting of the National Solidarity Fund Management Committee is expected to examine the issue, with representatives of affected groups taking part. Reports that around €30 million could be made available have caused fresh unease among members of the Laiki Bank Depositors’ Association (SYKALA) and the Association of Bank Bondholders (SYKATA).
Second payment could cover just 2-3% of losses
The approximately €30 million under discussion effectively comes from funds left unused from the roughly €100 million allocated for last year’s payments. That remaining amount had been expected to go this year to individuals whose applications were incomplete.
According to information obtained by Economy Today, the new plans would instead distribute the money as a second payment among both individuals who received bank haircut compensation last year and those whose applications contained missing information.
In practice, this would limit the new payment to around 2-3% of each person’s losses, substantially below the first payment in 2025, which covered 10% of losses.
One member of the associations described the proposed amount as “crumbs” and “certainly not a proper second payment”.
“It must finally be understood that we are not asking for charity, but for our money back,” the member said.
They added that assurances from President Nikos Christodoulides had indicated there would be a payment this year, rather than simply a redistribution of money left over from last year’s scheme.
Representatives of those affected also argue that their sense of injustice has grown amid the economy’s positive performance, repeated upgrades and increases granted to various groups, while difficulties remain in providing support to people who, they say, helped save the state through their savings.
Presidential assurances followed initial objections
The Finance Ministry had initially opposed the prospect of another payment, partly because of geopolitical developments.
The resulting reaction led to a meeting at the Presidential Palace with representatives of SYKALA and SYKATA on 5 August. Following the meeting, the associations received assurances from the Presidency that another bank haircut compensation payment would be made this year, although no details were provided on the amount or percentage.
Those assurances initially eased concerns among affected depositors and bondholders.
However, tensions have resurfaced following reports about the Finance Ministry’s latest plans, which are also outlined briefly in the agenda circulated ahead of today’s National Solidarity Fund meeting.
The reported €28-30 million allocation, and the estimated compensation for those who already received a payment last year, falls well short of expectations created by the 2025 scheme. The disagreement could therefore lead to renewed tensions during the meeting and in the days that follow.
DISY backs compensation over a decade
The issue was also raised recently during a meeting between the leadership of DISY, headed by party president Annita Demetriou, and the presidents and representatives of SYKALA and SYKATA.
According to a DISY statement, Demetriou reiterated that the party’s goal, as set out during the election campaign, is for losses to be restored over a 10-year period through annual payments.
“It is an injustice that occurred in our country as a result of misguided economic policies, and it must be remedied,” she said, recalling that DISY had played a leading role in establishing the Solidarity Fund.
Demetriou also stressed that economic stability and the implementation of growth policies capable of increasing state revenues were essential conditions for achieving that objective.
According to DISY, the meeting also addressed legal costs being sought from affected individuals in relation to lawsuits that have been withdrawn.
Demetriou said DISY would bring the issue before the relevant parliamentary Finance Committee so that it could be discussed in the presence of the associations.
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