Sunday was deemed a crucial day for the Cyprus-Eurogroup agreement and the Cyprus economy.

At 0830 (0630GMT) the cabinet began a meeting to approve a bill for an all-out haircut on Cypriot deposits which the House of Representatives will discuss in the afternoon.

The House will convene at 1600 while at 1130 this morning, the President of the Republic Nicos Anastasiades will go to the House to inform MPs on the agreement reached in the early hours Saturday in Brussels.

Opposition AKEL party’s central committee will convene this morning therefore it is highly unlikely its parliamentary group to attend the briefing by President Anastasiades.

Members of the House Finance Committee will be briefed after the Cabinet meeting, around 0930 by President Anastasiades.

All parties’ executive bodies or their Parliamentary groups have announced that they will convene before the House plenary session this afternoon where they will be asked to vote on the bill on the Eurogroup agreement, noting that a possible rejection would tantamount with an upset of the agreement.

President of the Republic Anastasiades will address the nation on Sunday, it was announced yesterday the exact hour of the address however has not been announced.

The bill was already given to the parliamentary parties on Saturday. In the attached report it is noted that the aim of the legislation is to impose a on off levy of 6.75% on deposits of up to 100 thousand euros and 9.9% on deposits over 100 thousand euros. The money collected will be transferred to a special account in each banking institution under the name of the Republic and will be made available for the purpose of rescuing and recapitalization of the banking sector.

It also provides that depositors will be given in return shares by the credit institutions of the Republic.

Citizens groups have expressed their opposition to the haircut of deposits and announced that today they would hold demonstrations outside the House. Demonstrations took place last night outside the Presidential Palace.

A Eurogroup statement, issued after the lengthy negotiations, welcomed the Cypriot authorities’ commitment to take further measures mobilising internal resources, in order to limit the size of the financial assistance linked to the adjustment programme. These include the introduction of an upfront one-off stability levy applicable to resident and non-resident depositors. Further measures concern the increase of the withholding tax on capital income, a restructuring and recapitalisation of banks, an increase of the statutory corporate income tax rate and a bail-in of junior bondholders.

Excluded from the international capital markets, Cyprus applied for financial assistance in June 2012 after its two largest banks sought state support, following write downs of Greek bonds amounting to €4.5 billion, as a result of the Greek sovereign debt haircut. The Cypriot financial assistance package is estimated at 17.5 billion, of which 10 billion will be provided by the ESM and the IMF. The one-off tax levy is estimated to yield €5.8 billion, while the remaining amount will emerge from a privatization programme, a capital gains tax increase and a 2.5% increase in the Cypriot corporate tax, currently at 10%.