In June 2012, Cyprus requested a $17 billion bailout from the European Union to bolster its ailing banks. In March 2013, the EU and IMF offered $13 billion and requested that Cyprus raise $7.5 billion by taxing all bank deposits. Deposits over 100,000 euros would face a rate of 9.9%, while deposits less than that would be taxed 6.75%. The proposal sparked protests in Cyprus and outrage in Russia—many wealthy Russians put their money in Cyprus banks, which are not heavily regulated. Parliament rejected the bail-out, and the threat of Cyprus being ousted from the euro zone loomed large.
Days later, the EU and Cyprus agreed to an alternative bail-out package that spared deposits of less than 100,000 euros the tax. Instead, the deal would restructure the country's weakest banks, the Bank of Cyprus and Laiki Bank. The Laiki Bank will be shut down, and deposits of less than 100,000 euros in the bank will be transferred to the Bank of Cyprus. Customers with deposits in excess of 100,000 euros stand to lose their assets because the larger deposits will be used to shoulder Cyprus's commitment to the bail-out. In return, Cyrpus will receive 10 billion euros ($13 billion) in loans. While the deal allowed Cyprus to remain in the euro zone, it leaves Cyprus with enormous debt and a future of austerity measures and sends a shiver to other struggling nations in the EU.
Anastasiadis Becomes President in 2013
On February 17, 2013, the presidential election was held. Leader of the right-wing Democratic Rally party, Nikos Anastasiadis won. Former Minister of Health and Progressive Party of Working People candidate Stavros Malas came in second, setting up a runoff, which was held a week later. Anastasiadis won the runoff, receiving 57.5 percent of the vote. Anastasiadis took office on February 28, 2013.