EU and Cyprus agree on €10bn bailout deal

The Cypriot government and eurozone finance ministers have agreed a €10bn (£8.5bn) bailout deal that includes a levy on deposits over €100,000.

As part of the restructuring, the country’s second largest bank, Laiki, will be wound down split into good and bad units and eventually merged with the Bank of Cyprus - following a model devised by the UK government to deal with Northern Rock.

Deposits over €100,000 will be subject to a one-off tax, the rate of which has yet to be agreed, and all deposits under that amount will be fully guaranteed.

Cypriot banks - including Laiki, which has branches across the UK - said that UK deposits will not be affected.

Last week the Cyprus government postponed a referendum on a deal that would...

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