In insisting on the deposit raid the eurozone has let down one of its smallest and most defenceless members — and for a sum of money that is “a rounding error” in EU terms, a leading Cypriot economist has warned.

Christopher Pissarides, a Nobel prize-winning academic based at the London School of Economics, told The Times that the overall bailout package agreed on Saturday may put Cyprus’s public finances on a more sustainable footing by putting the level of public debt to GDP at 100 per cent.

But this came at a serious cost, he warned. “As far as Cypriots are concerned, and Greeks I guess, the eurozone has lost credibility. They feel let down. After all Cyprus did not try to exploit low interest