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Wednesday, 22 November, 2017
Last Update 13:55
17:29    |    28/03/2013

Cyprus banks reopen amid tight security and tough curbs

Banks in Cyprus have reopened after a two-week closure amid EU-IMF bailout talks, with orderly queues for cash and strict limits on daily withdrawals. Branches were replenished with cash overnight and police were deployed amid fears of a run on the banks, BBC News informs.

Some queues did form but the mood was calm, and the country's president thanked Cypriots for their "maturity".

The restrictions on the free movement of capital represent a profound breach of an EU principle, correspondents say.

However, the European Commission on Thursday justified the move, saying the "stability of financial markets and the banking system in Cyprus constitutes a matter of overriding public interest".

Information from the Central Bank of Cyprus released on Thursday showed that foreign depositors had already withdrawn 18% of their cash from the nation's banks during February, before the current crisis hit home.

Across the street from my office is a branch of the Bank of Cyprus. It's now one hour before it's due to open and there's a small line of people arriving to queue. I would like to withdraw my money altogether. I don't have a huge amount and I lose with the "haircut", but I don't trust the banks or the government.

Money in a bank is supposed to be safe and that's not the case here. We are at the mercy of the EU and are trapped in the euro as it's too painful to get out. Everyone is furious because we feel that we are being robbed at gunpoint by the Europeans. It all started when Cyprus agreed to switch to the euro. As a nation we cannot compete with Germany economically. Germany is much more efficient than any other country in Europe.

The Europeans are not really interested in saving Cyprus. They are simply trying to save themselves. The answer is to drop the euro and return to the pound. This will be painful but at least there will be light at the end of the tunnel. Right now I see none.

Cyprus is the first eurozone member country to bring in capital controls.

Cyprus needs to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for a 10bn-euro bailout from the European Commission, European Central Bank and the International Monetary Fund, the so-called troika.

As part of the bailout plan, depositors with more than 100,000 euros will see some of their savings exchanged for bank shares.

An earlier plan to tax small depositors was vetoed by the Cypriot parliament last week.

 
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