Germany would have protected insured deposits: Schaeuble | Reuters

"But those who did not want a bail-in were the Cypriot government, also the European Commission and the ECB, they decided on this solution and they now must explain this to the Cypriot people."

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we faced decisions that had already been taken and came across faits accomplis

Cyprus President Nicos Anastasiades categorically denies reports saying that he dismissed a proposal to exclude deposits under 100,000 euros from an one-off tax, decided by the Eurogroup last Saturday, in the framework of a bailout agreement for Cyprus.

...In a written statement, Stylianides says that President Anastasiades fought to avert this “unprecedented development”, which he adds “has been imposed in a coercive manner by those who try today to justify their own decisions”.

Their position, he went on, was that the non-inclusion of depositors with savings up to 100,000 euros would not secure the necessary bailout sum.

Cyprus’ lenders, according to Stylianides, asked during the last Eurogroup meeting the closure of two major Cypriot banks, the transfer of deposits up to 100,000 euros to a “good bank” and the clearance of the rest of the deposits.

Though Cyprus only hit the front pages in the last month, its crisis has been years in the making. Athanasios Orphanides was governor of the Central Bank of Cyprus from 2007 to 2012, giving him a seat on the European Central Bank's governing council and oversight of Cyprus' banks. In an interview with The Economist, Mr Orphanides gives his views on how the crisis came about: exposure to Greece and the global financial crisis; decisions by the former communist government (with whom Mr Orphanides had a strained relationship); and flawed decisions by Europe's governments. Mr Orphanides was raised in Cyprus, received his PhD in economics from the Massachusetts Institute of Technology and was an adviser at the Federal Reserve Board. He is now a lecturer at MIT and a fellow at the Center for Financial Studies at the Goethe University of Frankfurt. The following is an edited transcript of the interview, conducted over the telephone and in writing in the last week.

But Draghi he was also scathing about Cyprus's initial plan to impose a levy on insured as well as uninsured bank depositors.

"That was not smart, to say the least, and was quickly corrected (by euro zone finance ministers)," he said.

Draghi said the finance ministers and the International Monetary Fund had wanted Cyprus to help pay for its €10 billion with a levy on wealthy depositors only.

Cyprus, however, had initially also sought to charge those with €100.000 or less even though they had a bank deposit guarantee. The move triggered a wave of concern in financial markets, fearing that investors elsewhere would be unnerved and start a bank run.