A branch of the Bank of Cyprus was bombed as a bailout deal was agreed.

Many fear the country's financial industry has been similarly damaged.

SOUNDBITE) (Greek) MAN IN THE STREET SAVVAS GEORGIOU, A PENSIONER, SAYING:

"The decisions taken are harsh, it is a catastrophe, it will be a long time before things are right again."

(SOUNDBITE) (Greek) MAN IN THE STREET, CHAMBIS YAKOS, SAYING:

"It all happened very fast, we were listening to the discussions but we don't understand it, we are not mathematicians."

To supplement a 10 billion euro loan from the EU Cyprus will tax bank depositors holding more then 100,000 euros.

Laiki Bank, the country's second-largest and most troubled, will close - it's bad assets put into a separate bad bank

Its smaller deposits will be transferred to the Bank of Cyprus. which will be shrunk and restructured.

Significant losses are likely says Tobias Blathner from Daiwa Capital Markets.

TOBIAS BLATHNER,