Some preliminary thoughts on the Cyprus bail-in litigation: A commentary on Mallis and Ledra

In 2013, Cyprus received financial assistance from the European Stability Mechanism after a restructuring and downsizing of the country’s troubled banking sector which included the contribution of uninsured bank depositors of the two biggest Cypriot banks through a bail-in. This article discusses the first two judgments of the European Court of Justice in cases brought by Cypriot depositors challenging the legality of the haircut of deposits and claiming damages from EU institutions. The article examines the judgments with regard to what are arguably the most important issues raised: effective judicial protection and the right to compensation. It draws lessons from the cases both in the context of the Cyprus bail-in and, more generally, with regard to the interplay between EU Courts and national courts concerning the justiciability of crisis-management or austerity measures.