The report deals with the social and political impact of the financial and economic crisis on the Republic of Cyprus. The economic crisis resulted in the shrinking of the economy and the austerity measures adopted led to the deterioration of living standards and the rise of social inequality. Emigration has increased substantially, resulting in shrinking but still strong immigrant communities and considerable brain drain from Cyprus.  Despite the fact that the changes occurring in various dimensions were big and significant, most of them have not been of a structural order. The reforms occurring were primarily of a managerial form and operating at the policy level with no major transformations in the civil administration, the public services, the labour relations system and overall the Cypriot economic model. At the political level, the most important change has been the rise of disaffection, distrust and abstention, while at the same time these tendencies were channelled mostly into apathy rather than contention and mobilization against existing political practices. Beyond a severe, negative impact on the social fabric and economic prosperity, the crisis period is also one of worsening political and system legitimacy.