Banks in the Republic of Cyprus began to deteriorate in 2010 due to risky investments with Greece. The two largest Cypriot banks, Cyprus Popular Bank (Laiki) and Bank of Cyprus (BoC), undertook losses, which made the country economically unstable. After requesting financial assistance from the Eurogroup and International Monetary Fund, there was an agreement for Cyprus to raise € 4.2 billion in return for a € 10 billion bailout. Part of the agreement in raising the funds was a levy of bank deposits towards the recapitalization needs of the two largest banks.
The Cyprus bail-in was unpopular and received much criticism because of its unprecedented and seemingly unfair condition. In this paper, I will investigate to what extent Article 17 of the Charter of Fundamental Rights of the European Union (Charter) protects European Union depositors from a ‘bail-in’ obligation using Cyprus as a case study. I believe that the levying of bank deposits, as a condition of a bail-out of Cyprus by the EU did not violate Article 17 of the Charter. However, I will argue that while the obligation was legal, the European Union should hold a higher standard for bank deposits with regard to Article 17 protection because of the special nature of bank deposits, and for the preservation of confidence in the EU banking system.
Recommended CitationPaul Artemou, Rights of European Union Depositors Under Article 17 of the Charter of Fundamental Rights After the Cyprus Bail-Out, 28 Pace Int'l L. Rev. 205 (2016)
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