Cyprus banks re-open; limits on transactions
Friday, March 29, 2013
NICOSIA, Cyprus (AP) — Banks in Cyprus reopened for the first time in nearly two weeks Thursday and prohibited people from withdrawing all their savings and triggering further chaos in the country’s financial system.
The limits on transactions, which include caps on withdrawals and money leaving the country, are a first in the 14-year history of the euro.
Across Cyprus, large but orderly lines formed ahead of the opening of banks for six hours from noon, and guards from private security firms reinforced police outside some ATMs and banks in the capital, Nicosia.
People filed calmly into banks across the country once they had opened, and no crowd issues were reported.
The country’s president, Nicos Anastasiades, expressed his “warm gratitude and deep appreciation towards the Cypriot people for the maturity and spirit of responsibility they have shown at a critical time for the stability of the Cypriot economy,” a statement from his office said.
In Nicosia, one 70 year-old pensioner who only gave his name as Ioannis arrived at the bank some two hours ahead of the scheduled opening time.
“I had to come this early, I came from my village 20 kilometers away, what do they want me to do, keep coming and going?” he said.
Banks have been shut since March 16 to prevent people draining their accounts as politicians scrambled to come up with a plan to allow Cyprus to qualify for $12.9 billion in bailout loans for its stricken banking sector.
The deal was finally reached in Brussels early Monday, and imposes severe losses on deposits of over 100,000 euros in the country’s two largest banks, Laiki and Bank of Cyprus. Laiki will be broken up, with its good assets being absorbed by Bank of Cyprus. The exact amounts of the losses have not yet been officially announced.
Some individuals and businesses, spotting that Cyprus’s economy was in trouble and that a tax on deposits was being discussed, had managed to move their money out Cyprus well before the banks closed their doors last week.
According to European Central Bank figures, deposits in Cyprus’s banks slipped 2.2 percent last month, to 46.359 billion euros, the lowest figure since May 2010 and down from a peak of 50.5 billion euros in May 2012. The figure excludes deposits from other banks and the central government.
Use the comment form below to begin a discussion about this content.
Please review our Policies and Procedures before registering or commenting