The Cypriot government dismissed Wednesday press reports that the Cyprus Popular Bank (Laiki Bank) has been sold to Russians.

According to a written statement by Government Spokesman Christos Stylianides, “the government dismisses information that the Laiki Bank has been sold to Russian investors”.

The decision of the European Council to proceed with a haircut of the Greek bonds resulted to financial difficulties at the Bank, which as a result was recapitalized by the Cypriot state.

The Cypriot House of Representatives rejected Tuesday a draft bill on Cyprus` bailout agreement that provides for an unprecedented levy to be imposed on savings in Cyprus banks (haircut) with 36 votes against and 19 abstentions.

The Eurogroup reached last week an agreement in Brussels which provided for a levy on savings that stung small account holders to the tune of 6.75% in exchange for a €10 billion sovereign bailout deal, whereas deposits over 100.000 euro would be charged with a 9.9% levy. The agreement also included an increase in corporate tax from 10% to 12.5%.

Excluded from the international markets, Cyprus applied last June for financial assistance from the EU bailout mechanism, after its banks sought state support following massive write downs of the Greek bond holdings amounting to €2.5 billion or 25% of the island`s GDP, as result of the Greek sovereign debt haircut.

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