Cypriot President Nicos Anastasiades told his citizens on Sunday that he has chosen the least catastrophic option and confirmed that depositors will get bonds linked to natural gas earnings for the haircut their bank accounts have suffered. He also said he is trying to change the terms imposed on Nicosia for the bailout of the 10 billion euros.

In a televised address Anastasiades admitted that Cyprus is undergoing “the most tragic moments since 1974,” in reference to the Turkish invasion that has led to the occupation of the northern third of the island.

“The first option would have led to a disorderly default as a result of the decision by the European Central Bank for the immediate stop of the emergency liquidity assistance to the two major Cypriot banks.

“The second is the option of a very difficult but controlled and manageable situation that will eventually lead to the stabilization of the economy and to a rebound,” said Anastasiades, rendering full account of the disastrous impact on the country a disorderly default would have entailed.

"In recognition of its obligations, the state will offer to those who will keep their deposits in Cyprus bonds equal to half of their contribution now, linked to the future public revenues from natural gas," he said, adding that all this is meant to relieve future generations from the consequences of this generation's mistakes.

Meanwhile the government has not yet announced that Tuesday is going to be a bank holiday although sources confirm that this has been the decision of the cabinet.