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It will then need to rely on borrowing on the bond markets in order to cover its still very large budgetary deficit.

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Among other things, the report by the committee of experts states that: ‘The selective way in which the haircut was applied raises questions of equity when depositors in foreign branches were spared, and other credit institutions in Cyprus receiving public money were not required to call on their depositors or members’.Thus the country is again in recession, as its economy has shrunk for three successive quarters, thereby gainsaying rumours that the country had returned to limited economic growth despite massive cuts to public spending and tax rises.