South Cyprus has been granted a last minute 10 billion euro bailout this morning.
The levy on bank deposits is scrapped, however, very large deposits in Bank of Cyprus and Laiki bank will bear the brunt of the levies.
The agreement means that South Cyprus banks will still receive emergency funds today, thus preventing total meltdown of the country’s financial sector. A potential exit from the eurozone was lurking on the horizon.
The decision to grant the bailout was made in the small hours of Monday morning. 17 eurozone finance ministers took part in a 12 hour long, tempestuous debate. It is said that President Anastasiades threatened to remove South Cyprus from the euro, at one point.
“It’s been a particularly difficult road to get here,” said Jeroen Dijsselbloem, the Dutch finance minister who chairs the committee of finance ministers. “We’ve put an end to the uncertainty that has affected Cyprus and the euro in recent days.”
More details to follow shortly.