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The Bank of Greece is seeking an internal banking institution that will take over the loans and network of branches of Cypriot banks operating in Greece. These include the Bank of Cyprus, and Cyprus Popular Bank (former Marfin Popular Bank). According to banking sources, these banks have assets amounting to 25 billion euro, as well as deposits amounting to 14 billion euro, and loans amounting to 20 billion euro in Greece.

The operation should be completed no later than Clean Monday (18 March); therefore the transaction’s details will be announced before the bank opens on Tuesday. According to sources, assets of Cypriot banks in Greece will probably pass under the control of TT Hellenic Postbank. This is a temporary solution, since TT Hellenic Postbank itself will soon be offered for sale. The problem is that TT Hellenic Postbank does not have the infrastructure and experience needed in order to take over such large assets. Alternatively, the option for the assets’ placement in one of the "good" banks is also being considered.

The final decision will burden the Financial Stability Fund, which is the largest shareholder in good banks and is responsible for the restructuring of the domestic banking system. It is not yet clear which country - Greece or Cyprus - will cover the financial gap that will occur due to the transaction. Capital to the amount of 2 billion euro will be needed and, given that the entire plan is being carried out in order to reduce the bailout package for Cyprus, it is more likely that Greece will pay the price.

Senior bankers told To Vima newspaper that they are concerned about the risk of panic that is currently seizing Cyprus after Eurogroup’s decision to cut bank deposits in Cyprus. Banking circles characterised this decision as dangerous for the European banking system, noting that it may cause a domino effect across Southern Europe. "Who can guarantee to depositors in countries that are implementing the financial adjustment programme that such measures will not be necessary in the future in order to finance deficits?," a senior banker asked. He noted that in the case that Europe does not clearly emphasise the uniqueness of the Cyprus case, there is a serious threat of a re-withdrawal of deposits from the periphery of Europe to safer countries in the Eurozone.

It is noted that, in 2012, the double elections cost the Greek banking system liquidity losses of around 18 billion euro, most of which have already been returned to Greek banks. If a new drain of savings from Greece to other countries is provoked, the domestic banking system’s liquidity will be burdened. Reportedly, however, deposits in Cypriot banks in Greece will not be cut. This is logical, since, otherwise, the stability of Greece's banking system would be endangered and this would burden the bailout package of Greek credit institutions. It is not clear, however, what will happen to deposits at branches of subsidiaries of Greek banks in Cyprus.

All this will be decided by the Act that will be passed in the Cypriot Parliament on Monday. As for deposits in Cypriot banks in Greece, they will not be cut and will be transferred to a local bank not later than Tuesday.

According to PASOK sources, it is essential that deposits in branches of Cypriot banks in Greece will not be touched and the government has to talk public’s fears away in a clear way. President of the party Evangelos Venizelos has contacted the leadership of TT Hellenic Postbank. PASOK expects the Prime Minister to inform the party about the development of the negotiations with the Troika during the new meeting, at which decisions will be taken on various topics which have already been discussed at previous meetings and which are included in the agreement of the three ruling parties.

Meanwhile, Cyprus residents were shocked by the news of cuts of their deposits and, on Saturday, they rushed to ATMs in order to withdraw their money. ATMs were emptied and there are not sufficient funds because of the three non-working days.

The meeting of Cypriot political leaders began at 8:30 p.m. on Saturday, after Nikos Anastasiadis returned from Brussels, where a rescue package for Cyprus was agreed. Many citizens who gathered in front of the Presidency chanted slogans against cuts in deposits. A group of about 250 people who called themselves “Citizens against cuts” requested this decision to not be implemented. Parliament’s President Yiannakis Omirou also returned urgently from London.

Since Sunday morning, the Cypriot government has been in session and the main theme is cutting deposits in Cypriot banks. Later, a meeting of Parliament also began, at which the President tried to persuade lawmakers to vote on the decision. So far, according to sources, votes "for" and "against" are divided evenly. The vote on the decision was postponed to Monday.

How events developed on Saturday

Since early morning, Nikos Anastasiadis has been informing political leaders on the phone. Meanwhile, in the afternoon, the government counter-attacked responding to criticism from the opposition. "The government took from the wealthy, prevented cuts in wages and pensions, and pointed out that the interest rate on deposits is the highest in the European Union." When questioned why the information on cuts in deposits was contradicted until Friday, a senior government official replied: "What were we supposed to do? If we had announced it, all depositors would have risen up."

There is information that trade unionists are trying to organise protests.

The Progressive Party of Working People (AKEL): The Government has overall responsibility