The National Solidarity Fund’s platform is expected to reopen in November for depositors and securities holders affected by the haircut who have not yet submitted an application, in order to announce a new plan in 2027, said Andreas Zachariadis, Director General of the Ministry of Finance, to the Parliamentary Committee on Finance.
It should be noted that no new program was announced in 2026. On Monday, the Committee reviewed a budget allocation of €28.7 million for 2026, an amount that was not disbursed from the €100 million program in 2025.
According to Mr. Zachariadis, the €28.7 million pertains to applicants who have already submitted applications and whose reduced amounts have been confirmed, but have not provided the platform with their IBAN so that the funds can be disbursed. This involves approximately 1,200 individuals, for whom the platform will reopen in the coming days. In addition, part of the €28 million will be paid to applicants whose appeals were accepted, as well as to some who were approved but could not be paid due to technical issues.
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The above is expected to cost around €10 million, with the remaining €18 million to be reallocated to those beneficiaries who have already submitted an application for the 2025 program; with Mr. Zachariadis estimating that they will receive at least an additional quarter of the amount they received last year, raising the reimbursement rate from the current 10%, to approximately 12.5%.
Furthermore, Mr. Zachariadis noted that there are plans to reopen the original platform this fall for those who have not yet submitted an application, a move expected to broaden the base for the compensation plan slated to be announced for 2027. He clarified that those who have already applied for the 2025 program do not need to resubmit their information, as they will be included in any subsequent program that is announced. He noted, however, that it has not yet been decided whether compensation for new applicants will reach, from the first year, the same percentage as that currently received by existing beneficiaries.
In addition to the 2026 budget, the Committee also examined, on its own initiative, the Fund’s operations and any problems that may arise, in the presence of the affected associations.
In response to a question from the Chair of the Finance Committee, DIKO MP Christiana Erotokritou, regarding how many people have been compensated to date, Mr. Zachariades stated that the corresponding amount had been paid to 7,160 individuals, including depositors and holders of securities.
Responding to DISY Member of Parliament Savia Orfanidou regarding the Solidarity Fund’s reserve, the Director General of the Ministry of Finance noted that it currently stands at €240 million, from which the €28.7 million included in the 2026 budget will be deducted, while, in the new fiscal year, a new government contribution of €50 million will be added.
The DISY MP also asked about the state-owned properties that were transferred to the Fund to increase its reserves, to which Mr. Zachariades responding that there is a constitutional obstacle to the transfer of the 12 state properties, valued at approximately €100 million, as state property may only be disposed of for public benefit purposes. However, Mr. Zachariadis clarified that since the Fund’s establishment, the government has provided it with a capital injection that has exceeded the initial value of €100 million of the properties, which are more readily available than those under real estate management.
Responding to another question from Ms. Orfanidou, as to why a new compensation plan was not announced in 2026, despite the government’s commitments, as well as a question from ELAM MP Marios Pelekanos, asking why the Fund’s entire reserve is not being paid out to beneficiaries, the Director General of the Ministry of Finance stated that all disbursements, including those from the Solidarity Fund, are taken into account within the budgetary ceilings set in accordance with a European directive.
“Allocating the €211 million will raise the ceiling by 2 points. The annual amount is subject to a limit due to these ceilings. Each year, the plan is drawn up based on the state’s budgetary capacity,” he clarified.
For his part, the spokesperson for the Laiki Bank Depositors’ Association noted that four disbursements were supposed to take place from 2023 to 2026, but only one actually occurred. Furthermore, he noted that 2026 was the best fiscal year in the last ten years and “if the government cannot fulfill this year the commitments it made starting in 2022, it will never be able to.”
A spokesperson for the Association of Bondholders spoke of an “orchestrated heist” and a delay in the administration of justice. He noted that there are many court rulings against Laiki Bank, through which “we have proven that we were victims of deception and fraud.” However, he added, the rulings are “moot,” since Laiki Bank no longer exists. He did, however, refer to a Eurogroup decision under which the state can compensate the victims.
He also estimated that the second installment would be paid to eligible recipients shortly before the presidential election, since, as he said, the families of those who suffered the “haircut” constitute “a major electoral force.”
Inclusion of Former Bank Shareholders in the Plans
Ms. Orfanidou also requested information regarding a legal opinion received by the Solidarity Fund from the Legal Service concerning compensation for former bank shareholders. Mr. Zachariadis pointed out that the legal opinion states that shareholders are covered by the legislation, but it is up to the specific plan to be prepared by the Fund’s Board of Directors to determine whether to include them and at what percentage. He clarified, however, that this involves a large number of individuals, with very small amounts.
When asked by Members of Parliament to state the government’s policy intention regarding their inclusion, Mr. Zachariades said that he could not bind the Fund’s Board of Directors with his statement.
A representative of the Association of Former Shareholders of the Bank of Cyprus said that the Solidarity Fund is attempting to remedy the violation of the constitutional right to property and, therefore, the former shareholders should also be treated the same as depositors and bondholders.
He also called on the Fund to cooperate with the Bank of Cyprus in the process of verifying the existing shareholders—numbering around 90,000—so that when the decision to compensate them is made, it can be carried out and the process expedited.
The spokesperson for the Borrowers’ Protection Association noted, in turn, that the Association is receiving complaints from former shareholders who are asking why they have been excluded. Many, she said, have taken out loans secured by their shares, noting that those who contact the Association are small investors who entrusted their savings to a “strong and healthy banking system”.
Claim for legal fees
Regarding the claim for legal fees awarded to the Republic in cases involving the haircut, Mr. Zachariadis said that wherever there is a court ruling, it must be enforced. He noted that it is easier to handle legal costs through a settlement before a court ruling is issued.
When asked by Ms. Erotokritou whether the policy intention is to take measures against those who owe legal costs in such cases, Mr. Zachariadis said that the state has no authority to intervene in the court’s decision, adding that the legal costs awarded to the state by the court are “money that belongs to the Republic’s Permanent Fund, and no one can dispose of it.”
Furthermore, a spokesperson for the Legal Service stated that the Attorney General does not write off amounts arising from court decisions. “The Legal Service is showing leniency regarding the collection of costs,” the spokesperson noted, adding that no collection measures have been taken so far, though no commitment was made that such measures would not be taken in the future.
For her part, a spokesperson for the Central Bank stated that, starting in 2023, there is a specific program that entitles plaintiffs to apply to the CBC for reduced attorney’s fees, and in some cases even to have them waived. There is also the option to pay in installments and extend the repayment period, he noted, clarifying that no enforcement measures have been taken.
A spokesperson for the Laiki Bank Depositors’ Association said that “those who were used in 2013 to save the state cannot be asked to pay on top of that,” noting that companies have shown more compassion regarding legal fees than the government and the Central Bank, while SYPRODAT also stated that “we settled many cases with the Bank of Cyprus, and they waived the fees,” while regarding the Legal Service, the issue is political.
Restoration of Bank Employees’ Provident Funds
Mr. Zachariades was also asked about the agreement between the government, the Bank of Cyprus, and ETYK to restore the Bank Employees’ Provident Funds, in order to eliminate the inequality between employees who left before and after 2017. As he noted, there are some procedural issues still pending, but “the intention is there,” and he estimates that the matter will be resolved by 2026.
Representatives of the Advocacy Group for the Haircut-Affected Provident Funds of the Bank of Cyprus and the Laiki Bank Employees’ Association stated that they are the only ones who “were hit by two haircuts,” in 2013 and 2017. “We are seeking €28 million on behalf of 841 people. It was acknowledged that the 2017 ministerial decision was a mistake,” she said, referring to announcements by the government, the Bank of Cyprus, and ETYK.
Following the conclusion of the Committee’s meeting, the Committee Chair, DIKO MP Christiana Erotokritou, stated that, starting in 2018, the first time the Solidarity Fund “was endowed with funds that could be immediately distributed to depositors subject to haircuts and holders of securities was in 2023 and thereafter.”
She also expressed her satisfaction with the impending resolution of the issue regarding the Provident Funds by 2026.
Regarding the issue of legal fees, Ms. Erotokritou said that DIKO expects there to be a political commitment that no measures will be taken to recover legal fees “from people who have already suffered not only financially since 2013, but also through the court system.”
DISY MP Savia Orfanidou, stated that DISY “played a leading role in the creation of the Solidarity Fund in 2018, after we first saved the economy from bankruptcy” and for this reason, “we want the Fund’s work to proceed smoothly and with honesty toward the people who paid the highest price for the economic disaster,” she said.
He also pointed out that there should be a supplementary budget in 2026 for a new plan to compensate those affected for their losses, while the application portal should also be opened for those who have not yet applied. He further noted that the legislation regarding the transfer of real estate to bolster the Fund has not been implemented, and that existing shareholders are unaware of the government’s plans, “nor is there a clear political position, despite the fact that they are beneficiaries under the law.”
Regarding legal costs, he said that “we insist that a legal and political solution must be found so that those affected are not burdened with additional costs,” calling for all matters to proceed in a fair, organized, and predictable manner.
AKEL MP Aristos Damianou, speaking before the Committee, proposed the creation of standardized regulations for the Solidarity Fund to ensure transparency. In remarks made after the Committee meeting, Mr. Damianou said that “the key figure behind the haircut was the one who, shortly before assuming the presidency, said ‘I pledge that Nicos Anastasiades will not sign any memorandum containing a deposit haircut’”—and that this would be “catastrophic” for Cyprus. However, as he added, “to respond to the banks’ greed and save the banks, society was hit with a haircut, and depositors were hit with a haircut.”
Mr. Damianou stated that AKEL’s demand is for a fair restitution, to the extent possible and feasible, for all categories of depositors and securities holders who suffered haircuts, as well as the Provident Funds. “I very much fear that these matters will be left until the end of 2027,” because elections are coming up, he said, noting that the decisions must be implemented as soon as possible, always within the limits of fiscal capacity.
Moreover, Mr. Damianou pointed out that “those who really should have paid were the banks that were bailed out, and secondarily, the state. Instead, we see the state stepping up at a time when the banks now have surpluses and, to a certain extent, should take responsibility for what happened in 2013 to save themselves.”
For his part, ELAM MP Marios Pelekanos, stated that it remains to be seen how the government intends to utilize the Fund’s large reserves in order to meet the needs of depositors, bondholders, and bank shareholders.
Source: CNA
