House approves €50m bail-in relief fund budget

The House on Thursday gave the nod to the 2027 budget of the Solidarity Fund, set up to reimburse people whose savings were wiped out in the 2013 financial meltdown. The budget provides for revenues of €50 million – a direct grant from the government – and anticipated expenditures of €28.7 million. The fund’s cash reserves, as of January 1 this year, came to €189 million. Out of the €28.7 million in projected expenditures, €10 million will concern payouts to people who applied for reimbursement as part of the 2025 scheme, but who for one reason or another did not receive the funds. In addition, the government reiterated its intention to reactivate the online platform for reimbursement applications. This would be done by the end of autumn, giving the opportunity to people who did not apply while the 2025 reimbursement scheme was in effect. The new applications on the platform will concern a new scheme to be promulgated for fiscal year 2027. Officials had earlier briefed parliament that during the initial scheme – for fiscal year 2025 – some 9,700 individuals applied. Payments were made to 7,160 people. The payouts amounted to €71.3 million. By comparison, total losses incurred by depositors and bondholders during the 2013 bank bail-in come to an estimated €2 billion. The Solidarity Fund was established in 2018. The government calls it a ‘partial replenishment scheme’ – avoiding the term ‘compensation’. Under the 2013 bailout deal between Cyprus and international lenders, uninsured depositors were forced to pay for the recapitalisation of the Bank of Cyprus, heavily exposed to debt-crippled Greece. As for Laiki Bank, all uninsured deposits there were wiped out, and the lender was wound down and its operations folded into the Bank of Cyprus.