Govt: Cyprus deal heralds new beginning

Nicosia - The Cyprus bailout deal concluded early Monday in Brussels ended uncertainty and prevented a "disorderly default" that could have seen Cyprus exit the eurozone, the Cypriot government spokesperson said.

"Finally, Cyprus has ended a period of uncertainty and insecurity for the economy. A disorderly default was avoided, which would have meant leaving the eurozone, with devastating consequences," spokesperson Christos Stylianides said in a statement.

"A disorderly default was avoided, which would have meant leaving the eurozone, with devastating consequences."

Early Monday the eurozone struck a deal with Cyprus to resurrect a bailout for its government, but only after a radical downsizing of the island's financial sector.

Under the terms of the agreement the island's second largest lender Laiki (Popular Bank) will be wound up while the Bank of Cyprus, the island's No.1 lender, will have to endure a major "haircut" on all deposits of more than €100 000.

"The important thing is that we have reached an agreement that allows us to kick-start the economy and lay the groundwork for a new beginning," Stylianides said.

"Without doubt that there are painful aspects that will place a burden on all of us."

Diko MP and chairperon of parliamentary finance committee, Nicolas Papadopoulos, too spoke of the pain the deal will deliver to Cypriots.

"Without a shadow of a doubt the eurogroup deal and bailout agreement with the troika is a very painful one," he said.

In other early reaction, Green party MP George Perdikes told state television, "once the pressure has lifted we should seriously look at whether staying in the euro is in our interest or whether it is worth changing our currency".

Former Cyprus central bank governor Afxentis Afxentiou told state radio "Cyprus has suffered a big hit and our standard of living will spiral downward, although the economy maybe able to recover in 2-3 years our standard of living will take at least 10 years to return."

Cyprus President Nicos Anastasiades, meanwhile, sent a tweet in which he expressed gratitude to Cypriots.

"Thank you for your messages of support. They gave me strength during last night's struggle to secure the best possible outcome for Cyprus," said the tweet.