Cypriots panic as rumours swirl of more bank closures after €10bn bailout

 

Anger at a deal aimed at saving Cyprus from bankruptcy spilled into the streets today with thousands of students and finance workers demanding answers after the government said banks would remain shut for two more days and details of strict capital control measures emerged.

The central bank governor, Panicos Demetriades, stressed that “superhuman” efforts were being made to open Cypriot banks on Thursday as he sought to quell fears that the nation’s largest lender, the Bank of Cyprus, was about to be shut down. Today its chairman offered to quit and hundreds of its employees marched to the central bank building to protest against potential job losses. The chairman’s offer was later rejected by the bank’s board.

“We are scared,” one employee who gave her name as Anthoulla told Reuters news agency. “We were also so proud of the Bank of Cyprus. We worked with a lot of love, not just for the money.” About 3,000 secondary school students also protested outside parliament in Nicosia.

In the deal hammered out in Brussels on Sunday, people with over €100,000 in the two biggest banks will have their deposits frozen. Those with under €100,000 in the second biggest bank, Laiki, would have their money transferred into the Bank of Cyprus, with Laiki eventually shut.

These and other measures are expected to raise the €5.8bn that Cyprus needed to qualify for the €10bn bailout from the International Monetary Fund and European Central Bank (ECB).

Mr Demetriades tried to reassure people worried about the future of the largest bank, saying that the merger of the Laiki and the Bank of Cyprus “will give us a very strong bank”.

Earlier in the day Cypriot Finance Minister Michael Sarris confirmed that those with uninsured deposits above €100,000 in Laiki bank could lose 40 per cent of their savings. But how long it will be before they can access the remainder of their money remains unclear.

The banks were meant to reopen today, but the government announced late Monday that they would remain closed until tomorrow as they tried to work out what capital control measures were needed to prevent the exodus of cash from the country.

The BBC reported that the measures being considered included a weekly withdrawal limit at cash machines, a ban on cashing cheques, and the requirement that fixed-term deposits must be held until maturity.

Mr Demetriades said that controls on the movement of money would be “loose” and “temporary”, but it is the uncertainty that has people across the small Mediterranean island on edge.

“It seems like they are lying to us,” said Chris Protopapas, a 43-year-old computer repairman in Paphos who has been unable to find work for two years. “They said they are going to give it back in a few years but we need to survive in that time.”

Despite the anguish the deal has caused in Cyprus, Jeroen Dijsselbloem, the head of the grouping of eurozone finance ministers, said on Monday that the bailout for Cyprus could be a template for other struggling eurozone members. His remarks sent the euro to its lowest value against the dollar since November, and yesterday a member of the ECB’s executive committee, Benoit Coeure, dismissed the idea.

“The experience in Cyprus is not a model for the eurozone since the situation had reached a dimension that can’t be compared with any other country,” Mr Coeure told France’s Europe 1 radio “I think Mr Dijsselbloem was wrong to say what he said.”

Companies and individuals in Russia, meanwhile, are beginning to look at what recourse they might have to challenge the appropriation of a percentage of their deposits in Cyprus. Russian are believed to hold as much as 40 per cent of the money in Cypriot banks.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own