Cyprus was treated as an experimental guinea-pig for testing the economic theory of enforcing a haircut on bank deposits, President of the Republic Nicos Anastasiades has said.

Speaking on Monday evening, during a reception hosted at the Presidential Palace for the Speakers of the EU Parliaments who are convening in Nicosia for a two-day conference concluding on Tuesday, President Anastasiades said Cyprus was treated as an experimental guinea-pig, “irrespective of the fact that there was reckless management by the banks affected and ineffective prudential supervision of the banking system in general.”

He also expressed the hope the Cyprus precedent “is not going to be applied elsewhere in Europe, although, as it is well known, the main ‘raison d’etre’ of a precedent is that it can serve the purpose of establishing norms and guidelines to be repeatedly and universally applied.”

Following a Eurogroup decision on March 25 and an agreement concluded between the Cypriot authorities and the Troika (European Commission, European Central Bank, IMF), a bailout deal for Nicosia foresees – among other provisions – losses on Bank of Cyprus’ uninsured depositors (over 100,000 euros).

Excluded from international markets, Cyprus applied in June 2012 for financial assistance, after its two largest banks sought state aid, following massive write downs of their Greek bond holdings amounting to €4.5 billion or 25% of the island`s GDP, as a result of the Greek sovereign debt haircut.

Addressing the guests, President Anastasiades said that during all his extensive contacts with his EU counterparts and high-level officials of the EU institutions before the Eurogroup agreement, which imposed a haircut on bank deposits, he had conveyed a clear message that Cyprus was not asking for special treatment, but expected a just and fair treatment, based on the same terms and conditions applied to all other EU partners in need, and that “we are requesting simply what we are entitled: solidarity.”

“Regrettably, this fundamental EU principle was not respected. On the contrary, decisions reached beforehand by the interested parties were coercively imposed. As Platon had argued: ‘Do not expect justice where might is right’,” the President pointed out.

He went on to say that, currently, the efforts of his Government are wholly devoted to alleviate, to the greatest extent possible, the impact of the Eurogroup agreement, in order to protect the interests of those affected, but also to re-establish confidence and trust in the economy of Cyprus and its banking system.

“To this end, I have already announced a series of measures and reforms reached by my Government during a two-day marathon session of the Council of Ministers. These policy initiatives concentrate on supporting vulnerable groups, tackling unemployment, promoting growth, offering favourable tax incentives for existing or new companies doing business in Cyprus, encouraging foreign investments, increasing Cyprus’ competitiveness and creating a more effective and business-friendly environment,” the President added.

During his welcoming address, the President also referred to the Lisbon Treaty and the reference to the contribution of national parliaments to the “good functioning of the Union.”

He also spoke of the increased role of the European Parliament, by bringing new fields within the “co-decision” procedure, ensuring that it has an equal footing with the Council on formulating the vast bulk of EU legislation.

President Anastasiades said that further developing inter-parliamentary cooperation between national legislatures and the European Parliament, provides the best possible solution for lessening the EU’s democratic deficit and bringing the Union closer to its citizens.

He added that such an enhanced cooperation can extend democratic control and accountability to decisions reached at the EU level and provide greater transparency and openness in the decision-making process, with the aim to improve democratic legitimacy, quality and efficiency of the legislative process of the EU.

“Most importantly, it can safeguard the principle of solidarity, which constitutes the very essence of what the EU represents, as envisioned by Robert Schuman 60 years ago, and ensure the equal pan-European application of EU rules and regulations to all members, irrespective of their size and economic strength. This is the true value of parliamentary diplomacy and the duty of each elected representative,” he pointed out.

In his speech, the President also referred to the Cyprus problem, reassuring that he remains committed to the reunification of the island, on the basis of the relevant UN Security Council Resolutions – which provide for a bizonal, bicommunal federation, with a single sovereignty, single citizenship and a single international personality – and the EU’s values and principles, its institutional legal framework and the acquis communautaire.

He added that the solution of the Cyprus problem should take into account the concerns of both communities of the island, Greek Cypriots and Turkish Cypriots.

However, he stressed, “it is paramount that our EU partners and institutions, as well as the political parties of the European Parliament, refrain from putting forward any proposals which will lead to the upgrading of the illegal entity in the occupied areas of the Republic.”

“Such proposals, aside from the fact that they will correspond to a violation of the principles of international law- including EU law- of the respect of the sovereignty and independence of states, will also undermine the efforts for a settlement of the Cyprus problem and constitute encouragement towards the partition of Cyprus,” he added.

Cyprus has been divided since 1974, when Turkey invaded and occupied its northern third.