Depositors affected by Cyprus’s 2013 bank bailout, who lost savings when their accounts were subjected to a “haircut,” are now being asked to pay the state’s legal costs after withdrawing lawsuits they had filed against it in the years that followed, according to the association representing them.
Several thousand lawsuits were filed and later withdrawn, with the vast majority of those affected now facing legal costs ranging from 1,500 euros to 20,000 euros each, the association said.
The 2013 haircut brought the Cypriot economy to the brink of collapse, closing businesses and wiping out families’ life savings. Thirteen years on, the state is now being called on to repay part of the cost through the Solidarity Fund, created to return money to affected depositors. That process is expected to take years, with the total amount sought, based on applications submitted so far, estimated at two billion euros.
The Central Bank of Cyprus has run a scheme offering reduced legal costs, covering both those wishing to withdraw pending lawsuits and those who had already withdrawn but still owed costs. The scheme remains in place until December 31, 2026.
SYKALA (Association of Laiki Bank Depositors) president Adonis Papakonstantinou told Phileleftheros the arrangement has failed to satisfy those affected. He said the state should stop pursuing legal costs altogether, since it bears responsibility for the haircut. He said the lawsuits were filed in district courts on the advice of the Supreme Court, after haircut depositors had first turned to that court seeking to annul the decrees underpinning the haircut.
Asked whether some lawyers may have taken advantage of depositors’ desperation, encouraging them to file lawsuits and raising unrealistic expectations of their outcome, Papakonstantinou said he had seen no evidence of this, based on his own experience. He said what depositors are seeking is neither reduced costs nor repayment terms, but the complete writing off of the legal costs owed by those who filed lawsuits and later withdrew them.
The issue is expected to be tabled in Parliament for discussion by the relevant committee.
€72 million paid out in 2025
On the Solidarity Fund itself, Papakonstantinou said around 72 million euros was paid to affected depositors in 2025, out of a total of 100 million euros budgeted. The remaining roughly 28 million euros could not be disbursed because of incorrect data and applications submitted, he said.
He said there was no update yet on when the next disbursement for 2026 would take place, or on how much would be allocated to cover further losses suffered by bailout depositors.
