The government intends to disburse the next compensation tranche to “haircut” depositors and holders of financial instruments through the National Solidarity Fund (NSF), either in March or April, according to information obtained by Brief from sources familiar with the ongoing process.

The 2026 state budget provides for an allocation of €50 million as a grant to the National Solidarity Fund, intended to compensate depositors and holders of financial instruments for losses incurred during the bank haircut.

The government’s intention regarding the payment of the next tranche was discussed during a meeting of the National Solidarity Fund members held last Wednesday, chaired by Andreas Zachariadis, Director General of the Ministry of Finance, who also serves as President of the Fund.

The NSF includes representatives of haircut depositors, haircut holders of financial instruments, and representatives of former shareholders of the Bank of Cyprus.

During the meeting, Zachariadis stated that of the €100 million provided in the 2025 budget for compensation payments, approximately €75 million has already been disbursed.

Discussion focused on how the remaining €25 million will be distributed. The Ministry of Finance appears to be facing procedural difficulties regarding whether or not this amount can be transferred within the budget framework of the current year.

According to Brief sources, there are considerations for the Ministry of Finance to prepare a supplementary budget, through which this amount would be transferred and distributed to eligible haircut victims whose applications remain pending.

An alternative proposal was also discussed, whereby the €25 million could be added to the €50 million provided in the 2026 budget for future compensation tranches.

This amount has already been deposited into the Republic’s consolidated fund.

The issue is expected to be the subject of further discussions between Finance Minister Makis Keravnos and Andreas Zachariadis, Director General of the Ministry.

There are also considerations for prior consultation with the House of Representatives regarding the remaining €25 million.

It is noted that during the first selection of eligible haircut beneficiaries for compensation, there appear to be approximately 2,000 applications which, for various reasons—mainly technical and procedural—were not included in the compensation package paid by the state in 2025.

Within the framework of the meeting, the need was once again raised for the state to also address the other category of haircut victims from March 2013, namely the former shareholders of the Bank of Cyprus.

The Ministry of Finance has left open, in discussions, a narrow window regarding the claims of thousands of former Bank of Cyprus shareholders.

It is noted that the first compensation tranche for bank haircut victims was paid last September.

A number of applications submitted through the platform—around 2,000—were not processed, either because they contained errors or required corrections.

It was found that certain data did not match the records of the two banks.

It is also noted that among those affected by the March 2013 haircut were deposits held by the Church of Cyprus.

As stated by the late Archbishop Chrysostomos and confirmed by the current Archbishop Georgios, the haircut on the Church’s deposits is estimated at approximately €100 million.

For decades, the Church had paid priests’ salaries from bank dividend income.