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In hindsight,  Cypriots would have preferred lower across-the-board haircut, poll finds

Most Cypriots believe there was no way to avoid the seizure of uninsured deposits that took place four years in the island’s two largest banks, that President Nicos Anastasiades knew a ‘haircut’ was coming when he pledged there wouldn’t be one, and that depositors – but not bondholders – who lost money should be reimbursed by the banks, a poll has found.

The poll, published by local daily Simerini on Monday, reflected telephone interviews with 500 random adult respondents on March 14 and 15, on the occasion of the 4th anniversary from the March 2013 Eurogroup decisions that included a ‘bail-in’ to recapitalise troubled Cypriot banks.

It showed that, in their majority, Cypriots blame the haircut on the banks themselves (96 per cent), their oversight authority Central Bank of Cyprus (97 per cent), the previous government (94 per cent), and parliament (91 per cent), rather than the Anastasiades government (although 65 per cent did say it has at least some responsibility).

Six out of ten respondents said the haircut was “unavoidable”, while almost nine out of ten believed Anastasiades was aware that the seizure of deposits was on the cards.

Still, six out of ten also said that the first proposed arrangement – for a universal levy on deposits across all Cypriot banks – would have been better than what actually happened after parliament rejected it.

Four years on, and with Cyprus having more or less successfully managed to recover from the 2013 meltdown, Cypriots feel tax cuts are in order, with almost half arguing for cheaper essential items and petrol, and 43 per cent wanting cheaper electricity.

In terms of restitution for those who suffered the most from the haircut decisions, 65 per cent of Cypriots feel that depositors should be reimbursed in full, with an additional 25 per cent saying they should be partially reimbursed.

The money to be handed back should come from banks, 62 per cent said, rather than the government (although one in four respondents opted for taxpayer-funded restitution).

On the other hand, opinions on whether bondholders should be treated on an equal footing with depositors were split three-ways. Compensation in full, in part, or not at all, were each favoured by about one in three respondents.

But if compensation were to be decided, more than half of those polled said the money should come from banks, with less than one in five calling for state-sponsored reimbursement scheme.

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