A European Union court has dismissed a petition for compensation by bank depositors whose funds were confiscated in Cyprus’s financial crisis in 2013, in a process which would become a European template for banks in trouble.
Depositors with funds in two Cypriot banks lost billions when savings were confiscated to protect the Eastern Mediterranean island’s banking system in 2013, in a process known as a bail-in.
The move was a condition sought by international creditors for a 10-billion-euro bailout to the east Mediterranean island.
“The Court concludes that the individuals and companies which initiated the actions have not succeeded in demonstrating an infringement of the right to property, of the principle of protection of legitimate expectations, or of the principle of equal treatment,” the General Court of the European Union, a division which addresses complaints against EU institutions, said in a news release.
The case was mounted by 51 people who lost funds and were clients of Laiki Bank, now defunct, and Bank of Cyprus.