(ANSAmed) - BRUSSELS - The Eurogroup has approved a plan to bail out debt-ridden Cyprus. The agreement was reached during the night in Brussels between the so-called troika - the European Union, European Central Bank (ECB) and International Monetary Fund (IMF) - and Nicosia and provides for a drastic downsizing of the island's banks in exchange for 10 billion euros in aid from the EU. Cyprus, the Eurogroup's President Jeroen Dijsselbloem declared, will engage in a 'consolidation programme of its budget, reforms and privatizations'. The country's second largest bank Laiki will be shut down. Laiki will be split into 'bad' and 'good' banks, with its good assets merged into the Bank of Cyprus as the emergency liquidity of the EBC (Ela) which will be handed back. Laikìs deposits under 100,000 euros will be guaranteed. However, deposit holders with more than 100,000 euros, worth 4,2 billion euros, will face major losses. The Bank of Cyprus, the country's largest in which many Russian investors have their deposits, will remain open. Deposit holders with more than 100,000 euros will also be facing significant losses to be decided at a later stage. The other banks will not be touched by the measures, which do not need parliament's approval. Cyprus' parliament had not backed a previous bailout plan including a levy on bank deposits. The first instalment of aid will be handed over in May. 'The agreement reached puts an end to uncertainties over Cyprus and the euro zone', said the Eurogroup's President Jeroen Dijsselbloem, explaining that the programme has an approach decided to confront the imbalances in the financial sector. There will be an appropriate reduction with the banking sector reaching the European average in 2018, he said.(ANSAmed).