Cypriot officials previously had said that large savers at Laiki -- which will be absorbed into to the Bank of Cyprus -- could lose as much as 80 percent, but they had said large accounts at the Bank of Cyprus would lose only 30 percent to 40 percent.
Asked about Saturday's announcement, University of Cyprus political scientist Antonis Ellinas predicted that unemployment, currently at 15 percent, will "probably go through the roof" over the next few years.
"It means that [people] . . . have to accept a major haircut to their way of life and their standard of living," Ellinas said. "The social impact is yet to be realized, but they will be enormous in terms of social unrest and radical social phenomenon."
There's also concern that large depositors -- including many wealthy Russians -- will take their money and run once capital restrictions that Cypriot authorities have imposed on bank transactions to prevent such a possibility are lifted in about a month.
Cyprus agreed Monday to make bank depositors with accounts over 100,000 euros contribute to the financial rescue in order to secure 10 billion euros ($12.9 billion) in loans from the eurozone and the International Monetary Fund. Cyprus needed to scrounge up 5.8 billion euros ($7.4 billion) on its own in order to clinch the larger package, and banks had remained shut for nearly two weeks until politicians hammered out a deal, opening again Thursday.
However, fearing that savers would rush to pull their money out in mass once banks reopened, Cypriot authorities imposed restrictions, including daily withdrawal limits of 300 euros ($384) for individuals and 5,000 euros for businesses -- the first so-called capital controls that any country has applied in the eurozone's 14-year history.
The rush didn't materialize, as Cypriots appeared to take the measures in stride, lining up patiently to do their business and defying dire predictions of scenes of pandemonium.
Under the terms of the bailout deal, the country' second largest bank, Laiki -- which sustained the most damage from bad Greek debt and loans -- is to be split up, with its nonperforming loans and toxic assets going into a "bad bank." The healthy side will be absorbed into the Bank of Cyprus.
On Saturday, economist Stelios Platis called the rescue plan "completely mistaken" and criticized Cyprus' euro partners for insisting on foisting Laiki's troubles on the Bank of Cyprus.