The Haircut of Cypriot Deposits and The PDF

THE HAIRCUT OF CYPRIOT
DEPOSITS AND THE PROTECTION

OF FUNDAMENTAL RIGHTS
Achilles C. Emilianides* and Christina Ioannou**
I. INTRODUCTION
When Carl Barks first created his fictional duck tycoon character Scrooge McDuck,1
little did he know that the day would come when his duck’s excessive financial
insecurity would no longer seem so eccentric. A big portion of the duck’s money
was kept in a massive money bin overlooking the city of Duckburg and viewers have
often enjoyed the duck take long dives in it. This seemed totally irrational; why would
anyone keep his money at home, rather than deposit it in a bank, where he could also
enjoy interest on that deposit?
In the Eurogroup meeting on Cyprus of 15 and 16 March 2013 (the “First
Eurogroup”), an unprecedented decision was taken to impose a “tax” on bank
depositors, as condition for Cyprus receiving a € 10bn bailout loan. This aimed at
reducing the cost of the bailout for the EU through a process of raising the necessary
funds to recapitalize Cypriot banks through depositors’ money. More specifically,
the decision involved a one-time levy of 9.9 per cent on deposits over € 100,000 –
the ceiling for the EU Deposit Guarantee Schemes (“DGS”) – and a one-time levy of
6.75 per cent on deposits below that level; those affected by the deposit levy would be
given shares of the affected banks.
Following the public outcry and rejection of the decision by the Cypriot House
of Representatives, a second Eurogroup meeting was held on 24 and 25 March 2013
(the “Second Eurogroup”), in which the decision was taken to safeguard all deposits
below € 100,000, in accordance with DGS. However, the country’s second largest
bank, Cyprus Popular Bank (“Laiki”) would be resolved with full contribution of
equity shareholders, bond holders and uninsured depositors. Laiki would further be
split into a good and bad bank, with the good bank folding into the Bank of Cyprus
(the country’s largest bank), taking € 9 billion of Emergency Liquidity Assistance
* Professor, Head of the Law Department, University of Nicosía.

** Assistant Professor in European Politics, University of Nicosía.
1 The richest fictional character according to Forbes. See D. Ewalt, ‘The 2013 Forbes Fictional 15’,
31 July 2013, available at www.forbes.com/sites/davidewalt/2013/07/31/the-2013-forbes-fictional-15/.
Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 141

Achilles C. Emilianides* and Christina Ioannou
(“ELA”) with it. The Bank of Cyprus would be recapitalised through a deposit-equity
conversion of uninsured deposits with full contribution of equity shareholders and
bond holders.2
Both the First and Second Eurogroup decisions formed an attempt to impose
a new pan-European paradigm for dealing with risks in the banking sector or the
economy of a Member State. Since 2008, when the financial crisis started, the EU had
spent a considerable amount of money on bail-out plans concerning Greece, Ireland
and other southern/peripheral states. Whereas the bailouts of Greece, Portugal and
Ireland forced investors holding bonds to take haircuts, bank deposits were left
intact and loans from European countries financed the bailouts. The situation in
Cyprus was very different, however, as depositors with Cypriot banks were treated as
investors.
It would seem that the particulars of this new paradigm were decided in
overnight discussions without much thoughtful assessment carried out in
advance;3 even more so, the paradigm changed within one week, from the levy
to all banks (DGS included) track, to the bail-in from the affected banks (DGS
excluded) track. The Eurogroup President Jeroen Dijsselbloem confi rmed that
this is a new paradigm4 and, despite his subsequent denials, 5 it has now been
established that a shift has taken place. The Eurogroup meeting of 27 June 2013
essentially agreed that the Cypriot bail-in model will act as template for dealing
with banking crises from now on.6 Th is was further confi rmed in the Eurogroup
meeting of 10 December 2013.7 Against this background, an assessment will be
made of the Second Eurogroup decision and the haircut of deposits from a human
rights perspective.
The aim of this article is to consider the human rights aspects of the decision to
impose a haircut on deposits. It is argued that the terms of the bail-in violate the
rights of depositors to property and freedom from discrimination, contrary to the
European Convention on Human Rights (“ECHR”) and the Constitution of Cyprus.
It is further argued that the safeguard of human rights in times of financial crises is
fundamental for the rule of law.
2 ‘Eurogroup Statement on Cyprus’, 25 March 2013, available at www.eurozone.europa.eu/

newsroom/news/2013/03/eg-statement-cyprus-25–03–13.
3 Μ. Schultz, ‘Statement of Conference of Presidents on Cyprus Banking Sector’, Brussels, 20 March
2013.
4 Transcript of the Joint FT-Reuters interview with Eurogroup President Jeroen Dijsselbloem,
26 March 13, available at http://blogs.ft .com/brusselsblog/2013/03/the-ft reuters-dijsselbloem-
interview-transcript/.
5 C. Volkery, ‘Is the New Eurogroup Head up to the Task?’ Spiegel, 26 March 2013.
6 ‘Bail-Ins: EU Deal Protects Taxpayers in Bank Bailouts’ Spiegel, 27 June 2013, ‘ECB’s Asmussen
Urges Europe to Accelerate Bail-In Plans’ Reuters, 9.6.2013, S. Blackenburg, ‘Why we Should
Remain Sceptical about the Rise of the Banking Bail-In’ Guardian, 28 June 2013.
7 J. Chatterley, ‘EU Set for more Cyprus-Style Bail-ins for Troubled Banks’, available at
www.cnbc.com/id/101263206, 11 December 2013.
142 Intersentia
The Haircut of Cypriot Deposits and the Protection of Fundamental Rights
II. DEPOSITS AS POSSESSIONS
Deposits constitute “possessions” protected by Article 1 of Protocol No. 1 to

the ECHR and the corresponding Article 23 of the Constitution of Cyprus.
The European Court of Human Rights has repeatedly held that the concept of
“possessions” has an autonomous meaning which is not limited to the ownership
of material goods, but includes other rights and interests that amount to property
rights. The notion of possessions has been widely defi ned in the Court’s case law to
include real and personal property, as well as other things considered as having an
economic value, such as shares, 8 goodwill in a business,9 licenses,10 fishing rights,11
planning permissions12 and rights flowing from leases.13 A key criterion to be
examined is whether the applicant bears title to a substantive interest safeguarded
by Article 1 of Protocol No. 1.14 Possessions can be either “existing possessions”
or assets, including claims which raise at least a legitimate expectation that they
will be realised.15 A legitimate expectation is deemed to exist so long as the
domestic law confers a sufficient legal basis for the interest; however, no legitimate
expectation arises where the proper interpretation and application of domestic
law is disputed and the applicant’s submissions are subsequently rejected by the
national courts.16
In view of the definition adopted by the Court there remains little doubt that
the affected bank deposits constituted “possessions” for the purposes of the first
paragraph of Article 1 of Protocol No. 1. Indeed, in Sukhorubchenko v Russia the
Court held that the applicant’s deposits with a private investment company amounted
to “possessions” for the purposes of Article 1 of Protocol No. 1.17
Whereas Article 1 of Protocol No. 1 does not oblige Council of Europe Member
States to maintain the purchasing power of amounts deposited with financial
8 Bramelid & Malmstrom v Sweden, 8588/79 8589/79 – [1982] ECHR 16 (12 October 1982).
9 Van Marle and Others v Netherlands, Apps 8543/79, 8674/79, 8675/79, 8685/79, Judgment of 26 June
1986.
10 Fredin v Sweden, (No. 1) – 12033/86 – Chamber Judgment [1991] ECHR 2 (18 February 1991),
Rosenweig and Bonded Warehouses Ltd v Poland, App. 51728/99, Judgment of 28 July 2005.
11 Baner v Sweden, 11763/85, Judgment of 9 March 1989, Alatulkkila and Others v Finland, 33538/96
[2005] ECHR 547 (28 July 2005).
12 Pine Valley Developments Ltd and Others v Ireland, (Article 50) – 12742/87 – Chamber Judgment
[1991] ECHR 55 (29 November 1991).
13 Mellacher v Austria, 10522/83;11011/84;11070/84 [1989] ECHR 25 (19 December 1989), para. 43.
14 Iatridis v Greece, 31107/96, Judgment of 25 March 1999, para. 54, Broniowski v Poland, App.
31443/96, Judgment of 28 September 2005, para. 129.
15 Gratzingerand Gratzingerova v Czech Republic, 39794/98, Judgment of 10 July 2002, para. 69.
16 Kopecký v Slovakia, 49912/98, Judgment of 28 September 2004, para. 50, EparhijaBudimljansko-
Nikšiæka and Others v Montenegro, 26501/05, Judgment of 9 October 2012, paras 66–69.
17 Sukhorubchenko v Russia, 60315/01, Judgment of 10 February 2005.

institutions,18 the haircut of Cypriot bank deposits did not refer to the purchasing
power of the deposited amounts, but rather it interfered with their very existence, as
the deposits were lost altogether or converted into equity. It is correct that the State
cannot be held responsible normally for acts or omissions of a private company;
however, in this case the loss of opportunity to recover the deposits in whole or in part
could be directly ascribed to a State act which brings the property complaint within
the ambit of Article 1 of Protocol No. 1.19 The banks implemented a decision of the
Cypriot Government, which was part of the bail-in programme and the Memorandum
of Understanding agreed between the Republic of Cyprus and the Troika and on
the basis of Decrees issued by the Governor of the Central Bank in deliberation
with the Minister of Finance and by virtue of legislation enacted by the House of
Representatives, as demanded by Eurogroup. Accordingly, in our view the decision for
a bail-in of deposits was a decision of the Republic of Cyprus for which the State is
liable.20
III. WAS THERE INTERFERENCE?
The European Court on Human Rights has repeatedly held that Article 1 of Protocol
No. 1 is comprised of three distinct rules. The first rule enunciates the general
principle of peaceful enjoyment of property and is contained in the first sentence
of the first paragraph. The second rule set out in the second sentence of the first
paragraph provides for the parameters governing the deprivation of possessions
and subject it to certain conditions. Finally, the third rule, contained in the second
paragraph recognises that Contracting States are entitled, amongst other things, to
control the use of property in accordance with the general interest.21 While distinct,
the three rules are not unconnected; the second and third rule govern particular
instances of interferences with the right to peaceful enjoyment of property and are
interpreted in the light of the general principle set out in the first rule.22
Under Article 1 of Protocol No. 1 Member States have both negative obligations,
not to interfere with the right of property, and positive obligations, to prevent an
18 Ryabykh v Russia, 52854/99, Judgment of 21 February 2003, para. 63, Appolonov v Russia, 47578/01,
Judgment of 29 August 2012.
19 Krivonogova v Russia, 74694/01, Judgment of 1 April 2004.
20 We will not consider in this article the question of whether the EU might be liable for damages for
the Cypriot bail-in, in view of the fact that the decision was effectively imposed to the Republic
of Cyprus by the Eurogroup and Troika. See, however, for this issue the Opinion of T. Tridimas,
A. Milner, ‘In the Matter of Losses of Deposits in Cypriot Banks’, London, 10 September 2013
(unpublished).
21 Sporrong and Lönnroth v Sweden, 7151/75 [1982] ECHR 5 (23 September 1982).
22 James and Others v United Kingdom, 8793/79, Judgment of 21 February 1986, Beyeler v Italy,
33202/96, Judgment of 5 January 2000, para. 98. Michael Theodossiou Ltd v Cyprus, 31811/04,
Judgment of 15 January 2009, para. 75.
144 Intersentia
interference with the right of property.23 The boundaries between the State’s positive
and negative obligations may not be precisely distinguished.24 An interference with
the right of peaceful enjoyment of property must therefore strike a fair balance
between the demands of the general interest of the community and the requirements
of the individual’s fundamental rights; thus, there must be a reasonable relationship
of proportionality between the means employed and the aims pursued. It has been
recognised that the State enjoys a certain margin of appreciation in determining the
steps to be taken in order to ensure compliance with the Convention in this respect.
It has therefore been held that the situation envisaged in the second sentence of
the first paragraph of Article 1 is only a particular instance of interference with the
right to peaceful enjoyment of property as guaranteed by the general rule enunciated
in the first sentence and that therefore the Court may well examine an impugned
measure which may not be classified in a precise category in the light of that general
rule.25 Whereas, loss of ownership of property resulting from a legislative measure
will not always be considered as a deprivation of possessions,26 recent case law
suggests that the classification of a general measure as “control of use” of property
rather than ‘deprivation’ of possessions is not decisive, since the principles governing
the question are substantially the same, requiring both a legitimate aim and the
preservation of a fair balance between the aim served and the individual property
rights in question.27 The Court has repeatedly held that the application of tax law
imposing an unreasonable burden on applicants or undermining their financial
situation and thereby failing to strike a fair balance between the various interests
involved, may well amount to a violation of Article 1 of Protocol No. 1.28 It has
further held that a legislative amendment which removes a legitimate expectation
may amount to an interference with possessions.29
In the present case, deposits with the two Cypriot banks were written off and
converted into shares of the Bank of Cyprus. It is considered that this clearly amounts
to deprivation of possessions, and in particular of the deposits which were affected; it
further amounts to an interference with the depositor’s right to peaceful enjoyment
of possessions.
23 Loizidou v Turkey, App. 15318/89, Judgment of 18.12.1996, Oneryildiz v Turkey, 48939/99, Judgment
of 30 November 2004.
24 Broniowski v Poland, 31443/96, Judgment of 28 September 2005.
25 Lithgow and Others v United Kingdom, 9006/80, 9262/81, 9263/81, Judgment of 8 July 1986,
para.106.
26 Air Canada v United Kingdom, 18465/91, Judgment of 5 May 1995.
27 N.K.M. v Hungary, 66529/11, Judgment of 14 May 2013, para. 44.
28 M.A. and Others v Finland, 27793/95, Judgment of 10 June 2003, Imbert de Tremiolles v France,
25834/05 and 27815/05, Judgment of 4 January 2008, Spampinato v Italy, 69872/01, Judgment of
29 March 2007.
29 Maurice v France, 11810/03, Judgment of 21 June 2006, paras 67–71, Draon v France, 1513/03,
Judgment of 6 October 2005, paras 70–72, Hasani v Croatia, 20844/09, Judgment of 30 September
2010.

IV. THE LAWFULNESS OF THE INTERFERENCE
Article 1 of Protocol No. 1 requires that any interference with the peaceful enjoyment
of possessions should be subject to conditions provided by law. Not only should any
interference be in accordance with the domestic law, but in order to satisfy the principle
of lawfulness, its legal basis must be compatible with the rule of law and must provide
guarantees against arbitrariness; this is because the rule of law is one of the fundamental
principles of a democratic society and a notion inherent in all the Articles of the
Convention.30 Accordingly, the legal rules upon which the deprivation of property is
based should be sufficiently accessible, precise and foreseeable in their application.31 It
has been held that a legal rule is foreseeable when it affords a measure of protection
against arbitrary interference by the public authorities and provides minimum
procedural safeguards corresponding to the importance of the principle at stake.32
With regard to interference with property rights, the Court tends to afford a
wide margin of appreciation to national judicial authorities, which are considered
in principle better placed than an international court to evaluate local needs and
conditions, especially in matters of general social and economic policy.33 In the tax
sphere, in particular, the Court’s established position is that States may be afforded
some degree of additional latitude in the exercise of their fiscal functions.34
It is submitted that the deprivation of deposits with the two Cypriot banks at
question was not lawful. To begin with, the legal framework imposing the deprivation
was established after the adoption and implementation of the decision on the haircut
of deposits. It is a fact that at the time when the decision on the deprivation was taken
by the Republic of Cyprus during the First Eurogroup, there was no legal basis for
such a decision.35
It should be further noted that the Second Eurogroup decision and the
corresponding Decrees of the Central Bank of Cyprus imposing the haircut of
deposits, were issued several days after the deposits were initially frozen, in accordance
with the decision of the First Eurogroup; during the intervening period, between the
First Eurogroup and the Second Eurogroup, these deposits could not be withdrawn
by the affected depositors. The freezing of bank accounts without any legal basis,
30 Former King of Greece and Others v Greece, 25701/94 [2000] ECHR 640 (23 November 2000), para.
79, Broniowski v Poland, 31443/96, Judgment of 28 September 2005.
31 Guiso-Gallisay v Italy, 58858, Judgment of 8 December 2005, paras 82–83, N.K.M. v Hungary,
66529/11, Judgment of 14 May 2013, para. 48.
32 Vistiòð and Perepjolkins v Latvia, 71243/01, Judgment of 25 October 12, paras 96–98; SudFondiS.r.l.
and Others v Italy, 75909/01, Judgment of 20 January 2009, para. 109.
33 Stec and Others v United Kingdom, 65731/01 [2006] ECHR 1162 (12 April 2006), para. 52.
34 National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building
Society v United Kingdom, Apps 21319/93, 21449/93, 21675/93, Judgment of 23 October 1997, paras
75–83, OAO NeftyanayaKompaniya Yukos v Russia, 14902/04, Judgment of 20 September 2011,
para. 559.
35 Paragraph 4.2.1. below.
146 Intersentia
immediately after the First Eurogroup, until the House of Representatives would
enact legislation, amounted, in our view, to a violation of Article 1 of Protocol No. 1.
It is therefore important to assess first the lawfulness of the First Eurogroup
decision, before proceeding to assess whether the Second Eurogroup decision and the
corresponding Decrees of the Central Bank of Cyprus were in accordance with the
rule of law.
A. THE VIOLATION OF THE DGS BY THE FIRST EUROGROUP

DECISION ON CYPRUS
The purpose of the DGS is to reimburse a limited amount of deposits to depositors

whose bank has failed. Their rationale is two-fold: first they aim to protect depositors
in the event of a bank failure and second they seek to maintain financial stability
by preventing depositors from making panic withdrawals from their bank, thus
preventing severe economic consequences.36 DGS thus exist throughout the EU,
providing last-resort protection to depositors.
In 1994 minimum protection standards were harmonised at EU level with
the adoption of Directive 94/19/EC on deposit-guarantee schemes.37 The German
government brought an action under Article 173 of the EC Treaty for annulment
of the Directive on grounds of subsidiarity; they were particularly opposed to the
provisions whereby branches of banks in states other than the home state are entitled
to join the host state scheme. They argued that this was a disproportionately generous
scheme which did not take into account the lack of adequate prudential supervision of
non-German banks by their home-country authorities. This was rejected by the ECJ.38
The 1994 Directive provided that all EU member states would have DGS in place,
even though it sought minimum harmonisation by means of a few basic requirements
for member states to implement. As a result, DGS in different member states varied
significantly with regard to: (a) the level of coverage, (b) the scope of covered
depositors and products and (c) the payout delay. This continued to cause disruptions
in financial stability and did not ensure the proper functioning of the Internal Market,
as account holders tended to transfer their deposits to banks in member states that
enjoyed a higher coverage, i.e. schemes that guaranteed a higher amount of deposits.
With the aim of ensuring long-term financial stability the Commission adopted,
on 12 July 2010, a legislative proposal for a new Directive, revising the rules of
Directive 94/19/EC. The new Directive 2009/14/EC tried to discourage depositors
36 E. White, ‘Deposit Insurance’ World Bank Policy Research Working Paper 1541, Nov. 1995, J.
Arrigunaga, ‘Insurance Schemes’ in M. Giovanoli (ed), International Monetary Law, Oxford: OUP,
2000: 324ff.
37 Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-
guarantee schemes.
38 Case C-233/94, Germany v European Parliament and the Council of the European Union [1997] ECR
I-2405.

from moving their funds from one EU country to another by increasing the
minimum level of coverage from € 20,000 to initially € 50,000 and, by 31 December
2010, to € 100,000.39 This essentially meant that the limit of € 100,000 would be
applicable to the total aggregate of each account-holder’s accounts (for instance
current, savings, and other accounts) with the same bank. Numerous member
states had in fact set their level of coverage at € 100,000 already or even provided
for temporary unlimited coverage during the financial crisis, even prior to the
implementation of the afore-mentioned Directive.40 The DGS Directive was
implemented in the Cypriot legal system by section 34 of the Banking Law no. 66 (I)
of 1997 as amended.
The decision to violate the DGS in the First Eurogroup decision on Cyprus was
a highly problematic one, not least because savers with deposits below € 100,000,
who rested assured on a solemn pledge that their deposits would be safe, were
forced to bail-in the bank through a haircut of 6.75 per cent.41 The decision not
only affected the level of trust people had in the DGS,42 but also the level of respect
of European officials towards Community legislation. The fact that Eurogroup
presented the levy on guaranteed deposits as a tax so as to evade the EU’s own
guarantee rules, does not lend legality to the action; instead it reinforces the feeling
that the “EU Single Market rules will be flouted when the Eurozone, ECB and IMF
says so”.43
Whereas the Second Eurogroup decision on Cyprus respected the guaranteed
deposits, it still maintained the idea of a bail-in by depositors and underlined the
notion that depositors are to be treated as investors from now on.44 Following the
Second Eurogroup, Eurozone leaders have repeatedly stressed that insured depositors
should feel safe; however, the same insured depositors were supposed to feel safe even
39 Directive 2009/14/EC of the European Parliament and of the Council of 11 March 2009 amending
Directive 94/19/EC on deposit-guarantee schemes as regards the coverage level and the payout delay.
40 European Commission, JRC Report under Article 12 of Directive 94/19/EC as amended by Directive
2009/14/EC, European Commission, Joint Research Centre, Unit G09, Ispra (Italy), 2010: 3.
41 C. Wyplosz, ‘Cyprus: The Next Blunder’, Vox 18 March 2013, available at www.voxeu.org/article/
cyprus-next-blunder.
42 E. Fingleton, ‘The Botching of the Cyprus Bailout: Worse Than Lehman Brothers’ Forbes, 17 March
2013 very accurately stated that the German-led group of EU officials: ‘have opted for a “solution”
that amounts to probably the single most inexplicably irresponsible decision in banking supervision
in the advanced world since the 1930s’.
43 As noted by the Chair of the Committee on Economic and Monetary Affairs of the European
Parliament Sharon Bowles, ‘The Cyprus Bailout Deal is a Disaster for EU Rules and Single Market
Principles’, available at http://sharonbowles.org.uk/en/article/2013/671744/the-cyprus-bailout-
deal-is-a-disaster-for-eu-rules-and-single-market-principles-bowles. Bowles further noted that:
‘This grabbing of ordinary depositors’ money is billed as a tax, so as to try and circumvent the EU’s
deposit guarantee laws. It robs smaller investors of the protection they were promised. If this were a
bank, they would be in court for mis-selling’.
44 G. Steinhauser, ‘Another European Divide: Protecting the Depositors’ Wall Street Journal Europe,
20 May 2013.
148 Intersentia
after the First Eurogroup.45 Had the Cypriot House of Representatives not rejected
the First Eurogroup decision, the new Eurozone rules might have been very different
today.46
B. CYPRIOT DOMESTIC LAW AND THE SECOND EUROGROUP
1. Interference without a Legal Basis
The Second Eurogroup decision was implemented by measures taken by the

Central Bank of Cyprus under Law 17(I)/2013 on the Resolution of Credit and
other Institutions which was adopted by the Cypriot House of Representatives on
22 March 2013. Its adoption followed pressure by the ECB to cut off funding of
Cypriot banks unless an agreement was reached between the Cypriot Government
and Troika. It is noted that in the week between the First and Second Eurogroup all
banks in Cyprus remained shut and, as a result, depositors could not withdraw their
deposits. Law 17(I)/13 had been prepared some months before in accordance with
the requirements of the draft Memorandum of Understanding between the Cyprus
Government and the Troika of November 2012 and, inter alia, it granted the Central
Bank of Cyprus wide powers to implement unilaterally various measures, including
a bail-in scheme (section 12 of Law 17(I)/13). Section 3 of Law 17(I)/13 provides that
the Central Bank of Cyprus, acting as Resolution Authority in conjunction with
the Minister of Finance can take measures for the resolution of credit institutions.
Secured debts or claims are the first to be compensated and if the sum available on
resolution does not suffice for the payment of all debts or claims, then the debts are
limited analogously.
Section 12 of Law 17(I)/13 grants the Central Bank of Cyprus the authority to
restructure, at its discretion, the debts and obligations of an institution under
resolution including by way of reduction, modification, rescheduling or novation of
the principal or outstanding amount of any type of claim, existing or future, against
the institution under resolution, or a conversion of debt instruments or obligations
into equity. Sections 3 §2 (d) and 25 of Law 17(I)/13, however, provide that the
creditors of an institution which is subject to resolution should not be in a financially
worse position due to the application of the resolution measures when compared to
the position they would have been in, if the said credit institution was liquidated.
45 R. Johnson, ‘Cyprus Fiasco could Undermine the Eurozone’ (2013) Spring International Economy:
40: ‘by pretending they were dealing with an isolated country, the nations of the European Union
have damaged the faith in deposit insurance throughout the euro zone. This may become a crippling
blow’, D. Elliot, ‘The Cyprus Difference: The Eurozone Can’t Unring the Bell on Bank Deposits’
(2013) Spring International Economy: at pp. 37–38, 80.
46 A. Sibert, ‘Deposit Insurance after Iceland and Cyprus’ Vox, 2 April 2013, available at
www.voxeu.org/article/deposit-insurance-after-iceland-and-cyprus, U. Dadush, ‘The
Botched Rescue in Cyprus’ Carnegie Europe, 21.3.2013, available at http://carnegieeurope.eu/
strategiceurope/?fa=51247.

Section 3 §2 (f) further stipulates that the interference with property rights should
not be contrary to the provisions of the Constitution and the ECHR.
Section 6 of Law 17(I)/13 provides that the Resolution Authority will take
resolution measures regarding a credit institution, only if the following requirements
are met: a) the Resolution Authority has evaluated the affected credit institution and
concluded that it is not, or may not be viable, because there is a reasonable danger
that the affected credit institution will not be in a position to fulfill its obligations,
or to continue functioning as an acting financial unit; b) resolution measures are the
only alternative allowing the credit institution to fulfill its requirements of capital
adequacy or liquidity; and c) the resolution measures are necessary to promote and
serve the public interest.
In accordance with Law 17(I)/13, the Central Bank of Cyprus adopted Decree no.
103 on the Bailing-in of Bank of Cyprus Public Company Ltd and Decree no. 104
on the Sale of Certain Operations of Cyprus Popular Company Ltd.47 Decree no.
104 provided for the transfer of Laiki’s assets and liabilities to the Bank of Cyprus,
subject to certain exceptions. In accordance with Decree no. 103, deposits in excess
of € 100,000 were converted into various classes of shares. In particular: a) 37.5 per
cent of the excess amount was converted into Class A shares; b) a further 22.5 per
cent of the excess amount was temporarily frozen in order to be converted into Class
A shares, so as to fully recapitalize the Bank of Cyprus; and c) the remaining 40
per cent of the excess amount was temporarily frozen for liquidity purposes. The
‘haircut’ of deposits in the Bank of Cyprus eventually amounted to 47.5 per cent of
the uninsured deposits. As a result 47.5 per cent of deposits in excess of € 100,000
were effectively, in our view, confiscated in exchange for shares of the Bank of
Cyprus so as to facilitate the recapitalisation of the Bank of Cyprus. Furthermore,
in accordance with the provisions of Decrees 96/2013 and 97/2013 of 26 March 2013,
the branches of both the Bank of Cyprus and Laiki in Greece were sold to the Greek
Bank of Piraeus.
At the time when the freezing of deposits took place, in order to impose a haircut
of deposits in accordance with the terms of the First Eurogroup decision, there
was no legal basis in domestic law authorizing either the freezing of deposits or the
imposition of a haircut. As already noted, the interference was contrary to the DGS
Directives as implemented in Cyprus in accordance with Section 34 of Banking Law
66 (I)/1997 and there was no domestic law authorising such an interference with the
right to property by the Central Bank of Cyprus or by the Government of Cyprus.
Accordingly, the freezing of deposits by virtue of the First Eurogroup agreement was
put in effect without any domestic legal basis. On the extraordinary meeting of the
plenary of 19 March 2013, the House of Representatives rejected the enactment of
legislation approving the terms of the First Eurogroup agreement. Banks subsequently
47 Official Gazette of the Republic of Cyprus, 29 March 2013, Part I, Annex III, as amended by Decree
no. 132/2013, Official Gazette of 21 April 2013, Part I, Annex III.
150 Intersentia
remained shut, as already explained, until the enactment of Law 17(I)/13 and the
conclusion of the Second Eurogroup decision several days later.
In view of the above, the freezing of deposits in order to impose a haircut
occurred without a legal basis. The affected deposits were those frozen immediately
following the First Eurogroup and the enactment of Law 17(I)/13 several days later
aimed to legitimise the imposition of a haircut on the affected deposits ex post facto.
This was not a situation where the application of Law 17(I)/13 would apply to future
cases; rather, Law 17(I)/13 was enacted in order to retroactively change the legal
status of deposits that had been frozen seven days prior to the legislation’s enactment
and remained frozen until the legislation was enacted. The present situation is not
comparable to the imposition of retroactive taxation, which at times may be imposed
to remedy technical deficiencies of legislation, as Law 17(I)/13 did not introduce
retroactive taxation, nor was the decision of the First Eurogroup rejected due to
technical deficiencies.48 In reality the retroactivity was not introduced by legislation,
but rather by administrative measures enacted in the form of Decrees by the Central
Bank of Cyprus in circumstances which do not seem consistent with the requirement
to respect human rights. It is rather paradoxical to claim that fundamental rights are
safeguarded if the State (ordered by the Eurogroup) proceeds to make an interference
without a legal basis, only to subsequently freeze the assets subject to that interference
until the required legal basis is enacted.
2. Article 23 of the Constitution of Cyprus and the Second Eurogroup Decision
Notwithstanding the problems identified in the previous paragraph, it is considered

that even if the retroactive enactment of legislation was held to constitute sufficient legal
basis in domestic law, the haircut of deposits imposed in accordance with the terms of
the Second Eurogroup would still be in violation of domestic legislation. As already
noted, Law 17(I)/13 provides that any interference with property rights should not be
contrary to the provisions of the Constitution and the ECHR. However, the haircut
of deposits was contrary to Article 23 of the Constitution of Cyprus safeguarding the
right to property. This had been declared unambiguously and without reservations by
the Central Bank of Cyprus, the same authority which eventually issued the Decrees
imposing the haircut of deposits, only a few days prior to the decision of the Eurogroup.
In particular, on 11 February 2013 Dr. George M. Georgiou, Head of the Governor’s
Office and Communications had sent an official letter to the President of the Cyprus
Bar Association and to other officials that stated the following:
“Following the publication of an article in the Financial Times dated 10 February 2013
and titled ‘Radical Rescue Plans for Cyprus’, the Central Bank of Cyprus wishes to
stress that any action aimed at reducing, depriving or restricting the property rights of
48 N.K.M. v Hungary, App. 66529/11, Judgment of 14 May 2013, para. 51.

depositors, contradicts the provisions of the Constitution of the Republic of Cyprus and of
Article 1 of the First Protocol of the European Convention on Human Rights, provisions
which protect the right to own property and which are crucial to the functioning of a free
market economy. Hence, any suggestion to the contrary is not only legally unfounded but
it cannot merit serious consideration”.49
The same position had been repeatedly reiterated by the President of the Republic
of Cyprus prior to the First Eurogroup.50 It is suggested that even if the discretion
of organs of the executive is wide, it is rather paradoxical for the Central Bank and
the Government to declare unequivocally and publicly that the haircut of deposits
is contrary to the Constitution and legally unfounded in domestic legislation and
subsequently the same organs to declare that the haircut of deposits is lawful because
the Eurogroup imposed it. The rule of law should not and cannot depend on political
pressure and inter-governmental interests.
Whereas Article 23 of the Constitution, guaranteeing the right to property,
corresponds to Article 1 of Protocol No. 1 of the ECHR, it is much more detailed
and extensive.51 Paragraph 1 of Article 23 provides that every person, alone or jointly
with others, has the right to acquire, own, possess, enjoy or dispose of any movable or
immovable property and has the right to respect for such right. By virtue of Article 23
§3 of the Constitution, no restriction or limitation of any such right may be imposed
by law, unless such is absolutely necessary in the interests of public safety, public
health, public morals, town and country planning, the development and use of any
property for public benefit purposes or for the protection of the rights of others. Just
compensation must be promptly paid for any such restriction or limitation which
materially decreases the economic value of the property in question.
It is therefore provided that any restriction or limitation: a) must be absolutely
necessary, b) for the purposes of specific interests and that c) just compensation must
be promptly paid; whereas requirements (a) and (c) will be separately examined in the
subsequent paragraphs, the second requirement will be examined in this paragraph.
Tornaritis, a former Attorney-General of the Republic of Cyprus, has correctly noted
that the constitutional provision regarding restrictions or limitations of the right
to property are stricter than the general principles of administrative law relating
to general restrictions of property which are based on the view that the individual
interest should yield to the public interest.52
49 The contents of the letter are available at inter alia at www.newsit.com.cy/default.
php?pname=Article&art_id=112163&catid=31.
50 See, e.g., www.kathimerini.com.cy/mobile.php?modid=2&artid=122765.
51 A. Emilianides, Constitutional Law of Cyprus, (The Hague: Kluwer, 2014): 181ff, A. Loizou,
Constitution of the Republic of Cyprus, (Nicosia, 2001) (in Greek): 138ff, C. Tornaritis, The State
Law of the Republic of Cyprus, (Nicosia: Cyprus Research Centre, 1983) (in Greek): 170ff.
52 C. Tornaritis, The Human Rights as Recognized and Protected by the Law of the Republic of Cyprus,
(Nicosia, 1974). 11.
152 Intersentia
It should thus be examined whether the haircut of deposits was absolutely

necessary for any of the interests restrictively referred to in Article 23 §3 of the
Constitution. It is sufficiently clear that the restriction or limitation was not necessary
in the interest of public safety, public health or public morals or for town and country
planning. Furthermore, it was not necessary for the protection of the rights of others.
Whereas, it could be argued that the recapitalisation of the banking sector and the
bailing-out of the Cypriot economy might indirectly benefit Cypriot citizens, this
would not really be a convincing argument in our view. Interpreting the “protection
of the rights of others” so widely would provide justification for virtually all cases, as
anything allegedly related to the public interest might potentially benefit or safeguard
the interests of others. The justification in this case for the imposition of the haircut
of deposits was the recapitalisation of the banking sector. Any link to the protection
of the rights of others remains indirect and speculative.
It is further observed that a restriction or limitation by virtue of Article 23 §3 is
not allowed merely for the promotion of the public benefit (a term which is rather
wide), but only for “the development and utilization of any property to the promotion
of the public benefit”. Since the affected deposits were used in order to recapitalize
the bank, it might well be argued that there had been “utilisation” of the property to
the promotion of the public benefit. It might also be argued that the restructuring of
the banking system was intended to promote the public benefit. However, it might be
questioned whether such utilisation of property is for the public benefit, particularly
if the end result of the interference with the right of property is the recapitalization of
a privately-owned banking institution.
It should further be noted that in a recent judgment, the Full Bench of the
Supreme Court has held that a legislative provision may be declared unconstitutional,
if it is inconsistent with the principle of good governance which is an entrenched
principle of the Constitution.53 The principle of good governance further includes
the principle of the protection of legitimate expectations of the citizen,54 which
should accordingly be considered also as a constitutionally entrenched provision.
Furthermore, the principle of the protection of legitimate expectations has been
declared as a general and superior principle of Community law for the protection
of the individual.55 This has been confirmed by the European Court of Human
Rights, which has noted the importance of safeguarding the legitimate expectations
of citizens, as “good government depends upon trust between the governed and
the governor…unless that trust is sustained and protected governments will not
53 President of the Republic v. House of Representatives, Apps. 5–6/2010, Judgment of the Plenary of
the Supreme Court of Cyprus, 7.11.11 (in Greek). See also A. Emilianides, ‘Reviewing the Review
of Constitutionality: A Commentary on Th ree Recent Judgments of the Supreme Court’ [2013]
Yearbook of Cyprus and European Law 50ff (in Greek).
54 See e.g. Part X of Law 158(I)/99 on the general principles of administrative law which sets out the
principle of legitimate expectations of the citizens as part of the principle of good governance.
55 Cases C-104/89 and C-37/90, J.M. Mulder and Others v Council and Commission [1992] ECR I-3061.

be believed…”.56 This is also a further ground suggesting that the relevant Decrees
imposing the haircut of deposits violate the Constitution and Article 1 of Protocol
No. 1 to the Convention.
3. The Judgment of the Supreme Court of Cyprus in Christodoulou and its

Implications
It should be noted that the majority of the Full Bench of the Supreme Court of
Cyprus, in its decision in Christodoulou,57 held that the relevant Decrees affected the
legitimate interests of affected depositors only indirectly and as such the depositors
did not have legitimate interest and accordingly legal standing to fi le recourse under
Article 146 of the Constitution for judicial review of the said Decrees.58 It was
further held that the only persons directly affected by the Decrees were the banks
themselves which did not seek to have the decrees reviewed and the depositors
could fi le civil suits against the banks in order to safeguard their legal interests as
their status was that of creditors to the bank. The aforementioned decision did not
examine the issue of constitutionality of the Decrees which implemented the Second
Eurogroup decision, but rather decided on the basis of a technical legal interpretation
that the relevant Decrees could not become the subject of judicial review directly on
the basis of the principles of Cypriot administrative law. Rather they should become
the subject of judicial review indirectly when, and if, civil suits are to be adjudicated,
since they refer to civil law issues and not to administrative law issues.
It is submitted that the Supreme Court’s decision in Christodoulou failed to
produce an appropriate legal outcome. Paragraph 2 of Article 146 of the Constitution
provides that a recourse may be made by a person whose existing legitimate interest,
which he has either as a person or by virtue of being a member of a Community, is
adversely and directly affected by an act or omission.59 An administrative recourse
is not an actio popularis, entitling any interested citizen to lodge a resource with
the Supreme Court for review.60 The affected depositors in this case, however, had a

57 Cases 551/2013, 553/2013, 555/2013–567/2013, 569/2013–571/2013, 575/2013, 581/2013–583/2013,
586/2013–587/2013, 590/2013–607/2013, 609/2013–620/2013, 670/2013, Christodoulou and Others
v Central Bank of Cyprus and Others, Judgment of the Plenary of the Supreme Court of Cyprus,
7 June 2013 (in Greek). The majority judgment was delivered by Hadjihambis P. (Nathanael,
Pampalis, Clerides, Paschalides, Panayi and Michaelidou J. concurring); Papadopoulou and
Erotocritou J. dissented. The four remaining Judges of the Supreme Court excused themselves from
the proceedings.
58 Which regulates judicial review of administrative action. See in general A. Emilianides,
Constitutional Law in Cyprus, The Hague: Kluwer, 2014: 193ff, N. Charalambous, The Action and
Control of Public Administration, 3nd Ed, (Nicosia, 2013), (in Greek).
59 A. Emilianides, ‘Legitimate Interest in the Administrative Trial: A Review of the Case law’ Cyprus
and European Law Review 10 (2009): 631–699 (in Greek).
60 Chrysostomides v The Greek Communal Chamber [1964] CLR 397.
154 Intersentia
legitimate interest given that the Decrees of the Central Bank imposing the haircut
of deposits had damaged or negatively influenced their own pecuniary interests. It
is submitted that the Decrees in question were administrative acts of a regulatory
nature which directly affected the depositors and which accordingly could, and
should, have become the subject of judicial review by virtue of Article 146 of the
Constitution.61
It is undisputed that the imposition of a haircut of deposits affected the deposits
of each depositor in an individual manner and did not affect the interests of the bank
in a general manner, as would have been the case if the haircut was imposed on the
bank (in which case the creditors would have suffered the damage in an analogous
manner). It was the individual deposits and not the bank’s capital in abstracto that
was affected. As correctly noted by Judge Papadopoulou in her dissenting opinion:
“I consider that the Decrees are a classic case of application of an individual administrative
act/administrative act of general application. Whereas, the relationship between the
banks and the applicant is one of contract law, the Decrees introduced an administrative
procedure which affects, not only the banks (which did not themselves choose to sell their
operations or to bail-in), but also the applicants who have a contract law relationship with
them and draw legitimate interest in disputing the Decrees”.62
The Supreme Court decision suggests that the only type of recourse it would entertain
jurisdiction over by virtue of Article 146 of the Constitution would be one lodged by the
affected banks themselves. However, these banks were at the time, in accordance with
the Decrees, controlled by the Central Bank of Cyprus – the same authority that issued
the Decrees in the first place. Since the Central Bank of Cyprus could not be reasonably
expected to file recourse against its own Decrees, the decision of the Supreme Court
effectively implies that their legality could not be directly disputed in an administrative
recourse. This is hardly a satisfactory solution. Furthermore, the majority of the Supreme
Court’s reasoning undermines the promotion of the “public interest” justification; if the
relevant Decrees were directed only towards banks and the confiscation of deposits is
a matter of private law between the bank and affected depositors, then it becomes even
more questionable whether the aim of the haircut served the public interest, rather than
simply the interests of private banking institutions.
In its leading judgment of Yiallouros v Nicolaou63 the Supreme Court endorsed the
legal concept of drittwirkung, in accordance to which a plaintiff can rely directly on the
61 See also Cyprus Ports Authority v Sewerage Board of Larnaca [2000] 3 CLR 311 (in Greek).
62 Cases 551/2013, 553/2013, 555/2013–567/2013, 569/2013–571/2013, 575/2013, 581/2013–583/2013,
7 June 2013 (in Greek), dissenting judgment of Papadopoulou J (translated by the authors).
63 [2001] 1 CLR 558; See S. Papasavvas, ‘There is Drittwirkung of Human Rights in the Cypriot Legal
Order: Comments and Thoughts on the Judgment of the Supreme Court in Civil Appeal Yiallouros
v Nicolaou’ Dikaiomata tou Anthropou 15 (2002): 837–861 (in Greek).

constitutional provisions safeguarding fundamental rights in order to bring an action

for damages against another private individual (as opposed to a state actor) for the
violation of those rights. The effective application of fundamental rights presupposes
the right of a victim to seek compensation for damage suffered as a result of a violation
of his or her constitutional rights. Consequently, the violation of constitutional
rights is directly actionable before District Courts in the exercise of their civil law
jurisdiction.64
However, a District Court does not have jurisdiction to annul an administrative
act, since such an act may be annulled only by recourse before the Supreme Court
in the exercise of its administrative law jurisdiction under Article 146 of the
Constitution. It therefore remains to be seen to what extent the constitutionality of
the relevant Decrees will be challenged before the civil courts which will decide on
the civil suits by affected depositors against the banking institutions or even against
the Republic. If the District Courts eventually consider that the constitutionality of
the haircut of deposits (and by necessary implication, its compliance with the ECHR)
may not be examined, then this might well lead to a violation of Article 13 of the
ECHR which safeguards the right to an effective remedy.65
V. PUBLIC INTEREST AND PROPORTIONALITY
The Second Eurogroup decision and its implementing measures should be assessed by
reference to the Court’s case law on proportionality. It has been held that a measure
shall not be deemed compatible with Article 1 of Protocol No. 1, unless it is strictly
necessary to address the public interest at issue thereby satisfying the proportionality
test. Any interference with the right to the peaceful enjoyment of possessions
should therefore strike a fair balance between the demands of public interest on the
one hand and the protection of the individual’s fundamental rights on the other.
Accordingly, there must be a reasonable relationship of proportionality between the
means employed and the aim pursued.66 The Court conducts an overall assessment
of the various interests at issue, having regard to the need to interpret individual
rights as practical and effective and not merely theoretical or illusory. It has been
held that the conduct of the parties to the proceedings should therefore be taken into
account.67 The applicable procedures should also be evaluated comprehensively, since
64 DEL Tourist Kirzis Enterprises Ltd and Others v Sewerage Board of Limassol-Amathus [2000] 1 CLR
1946 (in Greek).
65 We will not address this issue here, since the cases have not yet been adjudicated before the District
Courts.
66 Scordino v Italy (no. 1) 36813/97, Judgment of 29 March 2006, para. 93, Jahn and Others v Germany,
Apps 46720/09, 72203/01, 72552/01, Judgment of 30 June 2005, para. 93.
67 Fener Rum ErkekLisesiVakfý v Turkey, 34478/97, Judgment of 9 January 2007, para. 46, Bistroviæ v
Croatia, 25774/05, Judgment of 31 May 2007, para. 35.
156 Intersentia
it has been held that an interference cannot be legitimate in the absence of adversarial
proceedings that comply with the principle of equality of arms, enabling arguments
to be presented on the issues relevant for the outcome of a case.68
As already indicated the public position of the Republic of Cyprus and its Central
Bank, prior to the First Eurogroup, had consistently been that the haircut of deposits
was unconstitutional and, as such, could not be implemented. The President of the
Republic declared that he was left with no other options because of the insistence of
Eurozone leaders that a haircut of deposits should be imposed.69 In view of Cyprus
participation in the EMU, the background to the decision on the haircut of deposits
cannot be seen in isolation, as it was directly associated with the financial crisis in the
Eurozone70 and the failure of the ECB’s institutional mechanisms.71 The Minister of
Finance of Malta who was present in the First Eurogroup even argued that the Troika
had put a ‘pistol to the head’ of the President of the Republic, who had been elected
only a few days before, in order to force him to accept the haircut of deposits.72
The decision to impose a haircut may thus not be properly evaluated, unless it
is considered within the political context in which it was taken. An assessment of
the background to the Second Eurogroup decision and its reasoning will therefore be
undertaken below.
A. FINANCIAL CONSIDERATIONS OR POLITICAL REALITIES?
It is true that responses to financial crises may take several forms.73 However, the
idea that a financial institution should collapse so that an austerity programme can
be better implemented is a dubious one at best. Programmes based on austerity have
68 Hentrich v France, Judgment of 22 September 1994, para. 42, Jokela v. Finland, 28856/95, Judgment
of 21 May 2002, para. 45.
69 See, e.g., G. Pikis, A. Kramvis and E. Nicolaou, Report of the Three Member Committee of Inquiry on
the Inquiry with regards to the Situation of the Banking System and the Economy of the Republic of
Cyprus, 28 September 2013.
70 T. Mayer, Europe’s Unfinished Currency: The Political Economics of the Euro, Anthem Press:
London, 2012, J. Van Overtveldt, The End of the Euro, B2 Books, Chicago, 2011.
71 J. Carmassi, D. Gros, S. Micossi, ‘The Global Financial Crisis: Causes and Cures’ (2009) 47 (5)
Journal of Common Market Studies: 977–996, M. Buti, N. Carnot, ‘The EMU Debt Crisis: Early
Lessons and Reforms’ (2012) 50 (6) Journal of Common Market Studies: 899–911, C. Ioannou
and A. Emilianides, ‘Financial Crisis: An Institutional Crisis for Europe’ (2012) 2 EuroDialogue:
171–181 (in Greek), B. Thorhallsson and P. Kirby, ‘Financial Crises in Iceland and Ireland: Does
European Union and Euro Membership Matter?’ (2012) 50 (5) Journal of Common Market Studies:
801–818. For the Cypriot fi nancial crisis in particular see C. Ioannou, A. Emilianides, ‘How the
Cypriot Crisis came to be: The Real Causes and Responsibility’ (2013) 12 Foreign Affairs: The
Hellenic Edition: 41–51 (in Greek).
72 E. Scicluna, ‘Cyprus: A Lesson for Life’ Times of Malta, 19 March 2013, available at
www.timesofmalta.com/articles/view/20130319/opinion/cyprus-a-lesson-for-life.462258#.
UVMSbuUe0ho.twitter.
73 N. Roubini and B. Setser, Bailouts or Bail-Ins? Responding to Financial Crises in Emerging
Economies, Institute for International Economics, Washington, 2004.

so far failed,74 and there is little evidence that one which follows the destruction of
the Cypriot banking sector could prove more successful.75 The logic behind both
Eurogroup decisions on Cyprus was that it would not be fair for European taxpayers
to finance risky banking investments.76 Whereas this approach has some merit, its
application in this case is not very convincing. Approximately 75 per cent of the
€ 10 billion bailout provided by the Troika will be used to refinance maturing debt
beneficially held by the ECB, which was one of the few interested parties that will
not suffer any financial damage under any of the proposed schemes. Furthermore,
the two affected Cypriot banks had suffered losses of approximately € 4.5 billion, as
a result of a previous Eurogroup decision, of 27 October 2011, which involved the
write-off of Greek government debt. This decision affected Cyprus in an extremely
disproportionate manner compared to any other country. This implies that a
significant part of the losses of Cypriot banks due to their risky banking investments
was given as a contribution to reducing Greek public debt, thus effectively
contributing towards the financial stability of the Eurozone. In particular, Cyprus
contributed approximately 5 per cent of the Greek debt reduction, despite amounting
to only 0.2 per cent of the European economy.
The two Cypriot banks held more than a third of their deposits in their branches
in Greece. In particular, the two banks had about € 15 billion of deposits in Greece as
compared to € 26 billion in Cyprus. Furthermore, a significant part of the € 9 billion
ELA was absorbed for losses in the afore-mentioned Greek branches. Yet the Troika
demanded and accordingly acted as facilitator for the branches of Cypriot banks in
Greece to be sold, free from liabilities (particularly the ELA) and without depositors
in Greece suffering a haircut. The ECB and the European Commission justified their
insistence to sell the Cypriot branches in Greece by effectively arguing that such
sale would contribute towards breaking the channel of contagion between Cyprus
and Greece and that a potential bank-run in the Greek branches might undermine
confidence in the Greek banking sector.77
74 C. Douzinas, Philosophy and Resistance in the Crisis: Greece and the Future of Europe, Polity Press:
Cambridge, 2013, Η. Patomaki, The Great Eurozone Disaster: From Crisis to Global New Deal, (Zed
Books: London, 2013); M. Blyth, Austerity: The History of a Dangerous Idea, (Oxford: OUP, 2013),
C. Lapavitsas, Crisis in the Eurozone (Verso: London, 2012).
75 W. Black, ‘The New York Times Th inks Bleeding Cyprus Is ‘Strong Medicine’ 9 April 2012, available
at www.huffi ngtonpost.com/william-k-black/the-new-york-times-thinks_b_3043669.html.
76 Transcript of the Joint FT-Reuters interview with Eurogroup President Jeroen Dijsselbloem,
26 March 13, available at http://blogs.ft .com/brusselsblog/2013/03/the-ft reuters-dijsselbloem-
interview-transcript/: ‘In other words, taking away the risk from the financial sector and taking
it onto the public shoulders is not the right approach. If we want to have a healthy, sound fi nancial
sector, the only way is to say: “Look, there where you take on the risks, you must deal with them.
And if you can’t deal with them, you shouldn’t have taken them on and the consequence may be
that it’s end of story’.
77 Rehn and Asmussen, joint answers to the questions of MEP’s. Bowles και A. Duff, available at
http://andrewduff.blogactiv.eu/2013/05/14/replies-to-the-questions-by-the-members-of-the-
econ-commitee, Jorgen Dijsselbloem, the President of the Eurogroup further stated before the
158 Intersentia
This exclusion of the Greek branches was not consistent with the alleged intention
to have bank depositors assume the risk of their failed “investment”. Depositors in
Greece did not suffer any consequences for the risk they had assumed, because Greece
was considered as systemic for the Eurozone, despite the fact that the Greek branches
were instrumental in the failure of the two Cypriot banks. This effectively amounted
to depositors in the two Cypriot banks being heavily penalised, as they were forced
to suffer an increased haircut of their deposits in order to cover for the exclusion
of the Greek branches from the ambit of the Eurogroup decision. Accordingly, the
principal guiding force of the decision to sell the Greek branches was the financial
stability of the Eurozone, as expressed through the breaking of the risk of contagion
between Cyprus and Greece. Depositors in the Greek branches were thus considered
as more ‘worthy’ of protection compared to depositors in Cypriot banks, not because
this was economically just or justifiable, but because political considerations were at
stake. Arguably, the collapse of the Cypriot economy would not hinder the Eurozone
economy owing to Cyprus’ small size, whereas a (re)collapse of the Greek economy
would most likely prove to be detrimental to the Eurozone’s interests.
Furthermore, the decision to transfer the € 9 billion ELA from Laiki to the Bank
of Cyprus rendered creditors and depositors of the latter liable for the debts and
liabilities of the former. This was a highly irregular decision, since ELA should not be
given priority over the uninsured depositors, as its claim is only against the collateral
and not over all assets.78 The provision of ELA aims at supporting solvent banks
facing temporary liquidity problems, in accordance with the position that central
banks should lend to illiquid banks during financial crises.79 In the case of Laiki, the
Governing Council of the ECB decided to suspend it as counter party for monetary
policy operations from July 2012 and funding was provided entirely via ELA by the
Central Bank of Cyprus, with the approval of the ECB. The provision of ELA funding
was increased as a result of deposit outflows. During the Eurogroup negotiations it
was indicated to the President of Cyprus that, unless he consented to the decision,
the provision of ELA would cease.80 The decision of the ECB Governing Council,
that the continued provision of ELA would be considered only if the proposed Euro
Economic and Monetary Committee of the European Parliament that: ‘The decision was delayed
to be concluded, due to the branches of Cypriot banks in Greece because we had to make sure that
everything would be ready to save those branches’. See ‘We Made the Best Possible Decision for
Cyprus, Eurogroup President Says’ Financial Mirror, 8 May 2013, available at www.fi nancialmirror.
com/news-details.php?nid=29743.
78 See, e.g., C. Xiouros, ‘Handling of the Emergency Liquidity Assistance of Laiki Bank in the Bailout
Package of Cyprus’, 21 April 2013, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_
id=2254499, M. Zachariades, ‘Fairness and Sustainability for Cyprus’ available at www.econbrowser.
com/archives/2013/04/guest_contribut_36.html.
79 X. Freixas, et al., ‘Lender of Last Resort: A Review of the Literature’ (2000) 18 (1) Journal of
Financial Service Research: 63–84.
80 Rehn and Asmussen, joint answers to the questions of MEP’s. Bowles και A. Duff, available at
http://andrewduff.blogactiv.eu/2013/05/14/replies-to-the-questions-by-the-members-of-the-econ-
commitee.

group programme was agreed upon, followed the First Eurogroup in an attempt to
‘convince’ the Cypriot President to agree with the Eurogroup’s terms.
It is unclear how a bank-run was supposed to be prevented by saving an illiquid,
if not insolvent, bank and by consequently undermining the confidence of depositors
in solvent banks. A solvent bank might well be permitted to fail in order to eliminate
the risk from the banking system altogether. However, the system is not cured by
permitting the insolvent bank to fail, while transferring the illness to another bank;
especially, if the latter happens to be an even more systemic one. Thus, not only
Greek branches, but also ELA, remained unscarred, whereas depositors of Cypriot
banks located in Cyprus suffered the consequences.81 In addition certain financial
institutions, the Government and public entities, as well as deposits belonging to JCC
Payment Systems Ltd, were exempted from the haircut.82 Other depositors, such as
insurance companies or educational establishments were subject to a lower haircut.
Effectively the order of creditor seniority is changed and exemptions were applied in
a highly selective manner. It is inexplicable why non-interest bearing depositors had
to suffer losses, whereas financial institutions, public entities or the ECB did not.83
It is arguable that there were several alternatives that could potentially be used
in the case of Cyprus which would be less disastrous for the national economy and
which would not violate the individual rights of depositors.84 However, there was
an underlying political message that Eurozone leaders wanted to send to a country
which was allegedly a tax haven, believed to be involved in flagrant money laundering
activities on behalf of Russian oligarchs.85 The fact remains that such rumours
of money laundering have never been corroborated by factual evidence. On the
contrary, Cyprus had been assessed in an overall positive light both by the Financial
Action Task Force on money laundering and the Moneyval-Deloitte evaluation.86
81 Economist, ‘The Cyprus Bailout. Unfair, Short-Sighted and Self-Defeating’ 16 March 2013,
available at www.economist.com/blogs/schumpeter/2013/03/cyprus-bail-out: ‘The euro zone may
cloak this bail-out in the language of fairness but it is a highly selective treatment’.
82 See www.cyprus.gov.cy/MOI/pio/pio.nsf/All/97F20A51E3FB5BFCC2257B3F00328328.
83 N. Lewis, ‘The Cyprus Bank Bail-In is another Crony Bankster Scum’ Forbes 3 May 2013, available
atwww.forbes.com/sites/nathanlewis/2013/05/03/the-cyprus-bank-bail-in-is-another-crony-
bankster-scam.
84 Such as Cyprus borrowing against the collateral of its natural gas reserves, or restructuring the
government debt as in Greece.
85 M. Persson, ‘Cyprus. An Island Pawn in a Game of Geopolitical Chess’ Telegraph 24 March 2013,
available atwww.telegraph.co.uk/news/worldnews/europe/cyprus/9949860/Cyprus-an-island-
pawn-in-a-game-of-geopolitical-chess.html, L. Thomas, ‘In Cyprus Bailout, Questions on whether
Depositors should Shoulder the Bill’ New York Times, 10 January 2013, available at www.nytimes.
com/2013/01/11/business/global/the-cyprus-bailout-question.html?pagewanted=all&_r=0,
B. Parkin, ‘Russia-Cyprus Money Flows Imply Laundering Schaeuble Says’ Bloomberg 21 January
2013, available at www.bloomberg.com/news/2013–01–21/russia-cyprus-money-flows-imply-
laundering-schaeuble-says.html.
86 S. Evripidou, ‘Dirty Money Were Just an Excuse for Bail-In’ Cyprus Mail 28 April 2013, available
at www.cyprus-mail.com/cyprus/dirty-money-claims-were-just-excuse-bail/20130428, ‘Germany
160 Intersentia
The crux of the matter was that Cyprus accounts for just 0.2 per cent of the
Eurozone GDP and it could act as the guinea pig for the new European experiment
on banking bail-ins. Cyprus is small and had not attempted to oppose the haircut of
the Greek debt (with disastrous results for the Cypriot economy), which had to be
unanimously approved by EU member states, in the vain hope that their co-operation
would be appreciated and rewarded.87 The fact remains that the Eurozone crisis has
proven to be a fatal blow for supporters of the common European idea.88 As a recent
research study has shown 85 per cent of European citizens feel that European unity
and solidarity has been severely or even permanently damaged by the economic
crisis.89
B. THE ‘DEPOSITORS AS INVESTORS’ ARGUMENT
As already explained, one of the main arguments supporting the bail-in philosophy
was that the depositors had taken a risk and should therefore be treated as investors;
especially in the case of Cyprus, the comparatively higher interest rates were used
as justification.90 However, classifying depositors as investors is not as simple an
exercise as implied by the reasoning of the Eurogroup decision. An investor is a
person who allocates capital with the expectation of a financial return; on the other
hand, whereas a depositor might also expect financial return in the form of interest,
this is not necessarily the case. Indeed, depositors affected in the case of Cyprus
included holders of current accounts (some with very low interest rates), or persons
who simply used the bank in order to effect a purchase, by transferring capital to
another person’s account and who had only temporarily (without expecting to receive
interest) deposited their money in the bank.
A great number of the affected depositors were individuals who deposited their
monthly salaries or other savings to the bank, in order to provide for their children’s
studies or for other similar needs. There were persons who had received loans from
other unaffected banks, by using deposits in the affected banks as collateral and who
were now faced with a situation of no longer having the collateral while still being
has Worse Money Laundering Record than Cyprus’ Financial Mirror, 12 January 2013, available at
www.fi nancialmirror.com/news-details.php?nid=28565.
87 H. Jenkins, ‘Cyprus Bailout Revisited’ Wall Street Journal 8 May 2013, available at
http://online.wsj.com/article/SB10001424127887323826804578468623463537166.html.
88 V. Borger, ‘How the Debt Crisis Explores the Development of Solidarity in the Euro Area’ (2013) 9,
1, European Constitutional Law Review: 7–36.
89 Open Society Initiative for Europe, ‘Europeans back Solidarity over National Self-Interest to Get
out of Crisis’ 2 April 2013, available at www.opensocietyfoundations.org/press-releases/europe-
stands-firm-europeans-back-solidarity-over-national-self-interest-get-out. See also F. Serricchio,
M. Tsakatika, L. Quaglia, ‘Euroscepticism and the Global Financial Crisis’ (2013) 51 (1) Journal of
Common Market Studies: 51–64.
90 See e.g. ‘Germany wanted drastic Haircut’ Cyprus Mail, 26 July 2013, available at
http://cyprus-mail.com/2013/07/26/germany-wanted-drastic-haircut.

called to repay the loan. There further existed employee funds, accounts of SME’s
and other similar situations. Thus, limiting the various forms of depositors to the
depositors of savings accounts seeking high interest rates is a fallacious argument. It
should further be noted that none of the affected banks was an investment bank and
that the interest paid by such banks was not higher than the respective interest paid
by foreign (including other European) banks operating in Cyprus.
The First Eurogroup effectively called upon depositors who had their money in
healthy banks to suffer a haircut, simply because it had been deposited in banks of
a Eurozone country which faced financial problems. Even if depositors were to be
treated as investors, there was still no logic behind an approach whereby financially
sound institutions should be destroyed (and depositors would have their individual
rights violated) in order to try and save other institutions which are financially
unsound. Assuming that the logic of the Second Eurogroup prevails, the crucial
question is whether depositors in the unhealthy banks were indeed in a position to
be vigilant and to have the information readily available to them. This does not seem
to be the case. A depositor should be protected as a person who is at an informational
disadvantage when it comes to considering whether the bank was sound or not.
Considerations of banking risk thus necessitate intervention by banking regulatory
authorities.91 However, both affected Cypriot banks were not included amongst
the banks that failed the stress test on Eurozone banks in July 2011.92 At the time
when the two Cypriot banks invested in Greek bonds, there was no precedent in
Europe of a write-off of national debt and the bonds were considered as zero risk
investment.93 Similarly, there was no precedent of a haircut of deposits or of a bail-in
similar to the Cypriot one. As has been rightly pointed out, rationalising by hindsight
an unexpected event as if it could have been expected, is hardly a rational course of
action.94
Even if there was sufficient warning for depositors, what was the depositor expected
to do? A depositor can hardly influence or exercise control over the decisions of the
Board of Directors of a bank. It is further extremely doubtful whether a depositor is in
a position to understand the annual reports of a bank in order to appreciate whether
such a bank is healthy or not; especially, if the information about the bank’s potential
instability is nowhere to be found, as in the case of the annual reports of Cypriot
banks. What is certain is that the new paradigm requires higher recapitalisation costs
91 C. Goodhart, The Evolution of Central Banks, London: MIT Press, 1988, 62ff.
92 See www.eba.europa.eu/risk-analysis-and-data/eu-wide-stress-testing/2011/results.
93 It should be pointed out that the two Cypriot banks mainly bought the bonds from German banks
which had themselves previously deemed such bonds as a good investment.
94 A. Apostolides, ‘We Could Have Seen this Coming. Or Couldn’t We?’ 4 May 2013, available at
http://euronomist.blogspot.com/2013/05/we-could-have-seen-this-coming-or-could.html. It is
indicative that even the Cypriot Nobel Prize winner Christopher Pissarides had falsely predicted on
2 March 2013 that Cypriot banks were an excellent opportunity for investment. See www.euro2day.
gr/news/world/125/articles/682804/ArticleNewsWorld.aspx.
162 Intersentia
to banks, with the burden indirectly falling upon the taxpayer – ironically the same
taxpayer whose interests the new bail-in policy is supposed to protect.95 In view of the
above, it is considered that treating all depositors as investors is hardly convincing.
A serious counter-argument to the aforementioned analysis might be that if the
decision to impose a haircut had not been taken, then the affected banking institutions
would have collapsed and thus the deposits (or at least the majority of them) would
have been written off. However, it is submitted that this is not convincing. To begin
with it should be noted that the ECB Governing Council had decided to suspend
Laiki Bank as counter party for monetary policy operations on 2 July 2012 and the
Bank of Cyprus in November 2012. Why then did the ECB wait until 21 March 2013
to decide that the two banks could not be considered solvent in the absence of an EU/
IMF program for Cyprus? Banks do not change their status from solvent to insolvent
overnight. If the argument is that the ECB can unilaterally decide whether a bank
is healthy until, for political reasons, it considers that it is not, then this approach is
hardly consistent with the need to safeguard individual rights.
It is further unknown whether depositors would not be better off if the Cypriot
branches in Greece had not been sold, or if the banks were liquidated in which
case depositors would be treated as creditors without a selective treatment taking
place. It is hardly convincing to claim that this was the only solution, when the
managing boards of the two banks never reached a decision in so far as the fate of
their institution is concerned, but rather the Government and the Central Bank
unilaterally decided that they should be resolved. Protection of individual rights
cannot be properly maintained if the only arbiter on whether the alternative options
would be better for the individual depositor-creditor of a private company, is the
Government, i.e. the same entity which reaches the decision.
As held by the European Court of Human Rights, a measure will not be reasonably
proportionate to the aim sought to be realized, if it deprives an applicant of his
possessions without specific and compelling reasons justifying the deprivation.96 It
is considered that in the case under consideration the principle of proportionality
has not been complied with. Fundamental rights can hardly be safeguarded when
decisions are taken without transparency.97
95 From an economic point of view the new paradigm might well increase the number of bank-runs,
as moral hazard is not mitigated. However, this will not be considered in this article. See, however,
D. Diamond, P. Dybvig, ‘Bank Runs, Deposit Insurance and Liquidity’ (1983) 91 Journal of Political
Economy 401, H. Garten, ‘Banking on the Market: Relying on Depositors to Control Bank Risks’
(1986) Yale Journal on Regulation 129.
96 N.K.M. v Hungary, 66529/11, Judgment of 14 May 2013, para. 75.
97 For a detailed analysis of the political and economic aspects of the Eurogroup decision see
C. Ioannou and A. Emilianides, ‘Cyprus and the EU following the Haircut of Deposits’ in Ioannou,
Sotiropoulos and Emilianides, (eds), Cyprus in a New Era, Foreign Affairs: The Hellenic Edition
and Hippasus, Nicosia, 2014, p. 125 (in Greek).

C. JUST COMPENSATION
It has been repeatedly held that where there is deprivation of property, there is an
expectation that compensation will be paid in order to strike a fair balance between
the individual and general interest and in order to protect individuals from a
disproportionate burden. However, Article 1 of Protocol No. 1 does not guarantee a
right to full compensation in all circumstances, since legitimate objectives of public
interest may call for less than reimbursement of the full market value.98 Under
Cypriot law, it has been held that the requirement of Article 23 of the Constitution
to provide a just and equitable satisfaction, implies that such compensation should
produce the full equivalent of the deprived property.99 Thus, the requirements of
domestic law are stricter than the requirements of the Convention. Compensation
normally refers to monetary compensation. In view of the above, it is considered
that the confiscation of deposits in exchange with shares of the affected banking
institution, at a price per share unilaterally determined by the Central Bank of
Cyprus, should not be considered as just compensation.
VI. THE RIGHT TO PROPERTY AND THE RIGHT OF NON-

DISCRIMINATION
Article 14 of the ECHR provides that the rights and freedoms set forth in the
Convention shall be secured without discrimination on any ground.100 The principle
of non-discrimination is further safeguarded in Protocol 12 to the ECHR. In order to
conclude that there is a violation of Article 1 of Protocol No. 1 taken in conjunction
with Article 14, a differential treatment without reasonable and objective justification
needs to be established.
It is argued that the Eurogroup decision amounted to a violation of the principle
of non-discrimination taken in conjunction with the right to property. Not only
were comparable situations treated differently without objective justification, as
has already been analysed in the previous paragraphs, but furthermore there was
discrimination between Cypriot branches and Greek branches of the Cypriot banks.
This effectively amounted to the affected depositors in the two Cypriot banks being
heavily penalized; since the amount needed for the recapitalisations of the Cypriot
banks was pre-determined, the exclusion of the Greek branches and of a number of
privileged depositors from the ambit of the Eurogroup decision, necessarily led to
the affected depositors suffering an increased haircut of their deposits compared to
what they would have suffered if the haircut had been also imposed to depositors in
98 Holy Monasteries v Greece, 13092/87, 13984/88, Judgment of 9 December 1994.

99 Moti v. Republic [1968] 1 CLR 102.
100 Partsch, K., ‘Discrimination’ in Macdonald, Matscher and Petzold, (eds), The European System for
the Protection of Human Rights, Martinus Nijhoff Publishers, Dordrecht 1993, p. 571ff.
164 Intersentia
the Greek branches or to the privileged depositors. It is argued that the difference in
treatment did not pursue a legitimate aim and there was no reasonable relationship
of proportionality between the means employed and the aim sought to be realised.
It is further argued that the blanket reduction of deposits above € 100,000 might
have potentially amounted to indirect discrimination. Discrimination may occur
where there is failure to treat different individuals or groups differently, without any
objective justification, in such manner so that an apparently neutral provision which
theoretically applies to everybody, in essence constitutes a disguised discriminatory
provision which discriminates between the claimant and other persons. As held by
the Court in its recent judgment in N.K.M. v Hungary, the right to property may be
violated if the impugned measure entailed an excessive burden on the applicant. In
this case the majority of depositors were not required to contribute to a comparable
extent to the public burden.101 Further analysis of individual cases of depositors
would, however, need to be undertaken by a court where a depositor might seek
judicial review, in order to decide whether there has been a violation of the right of
property due to the fact that the impugned measure entailed an excessive individual
burden on the applicant.
VII. CONCLUSION
In view of the above, it is argued that the Second Eurogroup decision violated Article 1
of Protocol No. 1. Deposits were lost altogether or converted into equity, which
amounted in effect to deprivation of property assets. The deprivation was contrary to
the existing legal framework, thus violating the rule of law. In addition, it is argued
that the interference with the right to property was in this case disproportionate
and amounted to an unjustified interference impairing the substance of the right.
Whereas a wide margin of appreciation is enjoyed in balancing the various interests
involved, the specific factual circumstances of the Cypriot bail-in violate this margin
of appreciation. The management of the Cypriot crisis has not only undermined
confidence in the crisis management skills of Eurozone leaders and the European
banking system, but it has further led to “an economistic narrowing of vision”,102
hindered the application of fundamental democratic ideas and undermined the
ideological aim of achieving an ever closer political union.
In his dissenting opinion in Christodoulou, Judge Erotocritou observed the
following:
“If the Decrees are not subject to judicial control, then the rule of law and the principle
of legality are under serious attack. Without the possibility of judicial control, national
governments, under the pressure or tolerance of European and other international organs,
102 J. Habermas, The Crisis of the European Union: A Response (Polity Press, Cambridge, 2012), p. 3.

some of which seem to act informally and in lack of transparency, could adopt measures
which they consider as serving the interests of the state, irrespective of whether such
measures single-handedly transform the economy of the economic models of the Member
States, so as to potentially violate the acquis communautaire on the pretext of a ‘political
decision’ or ‘an act of government’. To which extent the interests of the many, or the public
interest should restrict individual rights, should be determined within the limits of the
Constitution and the European Union Treaties, on the basis of judicial review and not
outside such review”.103
In these circumstances, we consider that judges “can and should do only one thing,
ignoring all else, and this is to administer the law whatever the consequences”.104
103 Cases 551/2013, 553/2013, 555/2013–567/2013, 569/2013–571/2013, 575/2013, 581/2013–583/2013,

7 June 2013, dissenting judgment of Erotocritou J (translated by the authors).
104 Cases 397/2012 and 480/2012, Fylachtou v Republic, Judgment of the Plenary of the Supreme Court
of Cyprus, 14 June 2013.
166 Intersentia

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THE HAIRCUT OF CYPRIOT

DEPOSITS AND THE PROTECTION

Achilles C. Emilianides* and Christina Ioannou**

* Professor, Head of the Law Department, University of Nicosía.

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 141

2 ‘Eurogroup Statement on Cyprus’, 25 March 2013, available at www.eurozone.europa.eu/

II. DEPOSITS AS POSSESSIONS

Deposits constitute “possessions” protected by Article 1 of Protocol No. 1 to

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 143

III. WAS THERE INTERFERENCE?

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 145

IV. THE LAWFULNESS OF THE INTERFERENCE

A. THE VIOLATION OF THE DGS BY THE FIRST EUROGROUP

The purpose of the DGS is to reimburse a limited amount of deposits to depositors

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 147

B. CYPRIOT DOMESTIC LAW AND THE SECOND EUROGROUP

1. Interference without a Legal Basis

The Second Eurogroup decision was implemented by measures taken by the

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 149

2. Article 23 of the Constitution of Cyprus and the Second Eurogroup Decision

Notwithstanding the problems identified in the previous paragraph, it is considered

48 N.K.M. v Hungary, App. 66529/11, Judgment of 14 May 2013, para. 51.

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 151

It should thus be examined whether the haircut of deposits was absolutely

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 153

3. The Judgment of the Supreme Court of Cyprus in Christodoulou and its

56 N.K.M. v Hungary, App. 66529/11, Judgment of 14 May 2013, para. 37.

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 155

constitutional provisions safeguarding fundamental rights in order to bring an action

V. PUBLIC INTEREST AND PROPORTIONALITY

A. FINANCIAL CONSIDERATIONS OR POLITICAL REALITIES?

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 157

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 159

B. THE ‘DEPOSITORS AS INVESTORS’ ARGUMENT

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 161

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 163

VI. THE RIGHT TO PROPERTY AND THE RIGHT OF NON-

98 Holy Monasteries v Greece, 13092/87, 13984/88, Judgment of 9 December 1994.

Cyprus Human Rights Law Review, Volume 2 (2013), No. 2 165

103 Cases 551/2013, 553/2013, 555/2013–567/2013, 569/2013–571/2013, 575/2013, 581/2013–583/2013,

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