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    With Tight Restrictions, Cyprus Banks Reopen

    With Tight Restrictions, Cyprus Banks Reopen

    It looks like the first day of banking in Cyprus after a post-bailout shut-down went swimmingly:

    The president of Cyprus said on Friday the risk of bankruptcy had been contained and the country had no intention of leaving the euro, in a speech laden with criticism of Europe’s currency union for “experimenting” with the island’s fate.

    Conservative leader Nicos Anastasiades spoke a day after banks reopened following an almost two-week shutdown to avert a run on deposits by worried Cypriots and wealthy foreign depositors as the country raced to clinch a rescue package from the European Union.

    Actually it looks like Anastasiades took a page from the Barack Obama “shared sacrifice” playbook, as the Cypriot president wants his citizens to “share the burden.”

    “Everyone will have to make sacrifices as our financial situation, in the violent way in which it has developed, will oblige all of us to share the burden” to reform the economy, [Anastasiades] added.

    I should think the financially astute would take little comfort in the calm yesterday, as tight restrictions are being imposed on both individuals and businesses for the next 30 days:

    The capital controls include limiting daily cash withdrawals to €300 ($383) per person and limiting payments abroad to €5,000 ($6,400). No checks can be cashed, although they can be deposited.

    Anyone leaving the country, whether Cypriot or a visitor, can only take up to €1,000 ($1,290) with them in cash.

    And while Anastasiades praised the “maturity and responsibility” shown by Cypriots under such tight fiscal controls, most are troubled by the realities of the bailout deal. A few of yesterday’s bank customers shared their thoughts:

    “You’ve no idea how much I’ve been waiting for this,” said 64-year-old pensioner Froso Kokikou, waiting in line at a branch of Cyprus Popular Bank, also known as Laiki.

    “I feel a sense of fear and disappointment having to queue up like this; it feels like a Third World country, but what can you do?” Kokikou said. “This is what they imposed on us and we have to live with it.”

    Kostas Nikolaou, a 60-year-old pensioner, said the uncertainty of the past two weeks had been “like a slow death”.

    He added: “How can they tell you that you can’t access your own money in the bank? It’s our money, we are entitled to it.”

    I suspect that the political leaders of Cyprus are hoping that their citizens will have forgotten about the plans to tax deposits and implement levies in a month. Or, perhaps they are counting on another major distraction so people forget about not being able to access their money.

    It will be interesting to see what happens in Cyprus at the end of April.

    I suspect it’s going to remind people of a quip by Madame de Pompadour, French courtesan and mistress to King Louis XV: “After us, the deluge.”

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    Comments

    30 days of restrictions in place for Cypriot’s own money?

    I suspect the run on the bank will be on May Day. Ironic that that is the day most communists celebrate “Workers of the world unite.”


     
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    heimdall | March 29, 2013 at 4:32 pm

    There needs to be a run on the banks, otherwise these Euro-idiots and our idiots will think to emulate this elsewhere. This was blatant theft and should be punished (like what is going on at the Fed).


     
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    Henry Hawkins | March 29, 2013 at 5:14 pm

    More evidence of American exceptionalism – most American citizens would not stand for this.


       
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      gs in reply to Henry Hawkins. | March 29, 2013 at 5:27 pm

      Quite a few years ago there was a trial balloon about the government deducting taxes on earned interest directly from bank accounts.

      It was probably during the Clinton years because I recall Barney Frank, posing as the voice of reason, tak-tsking about why people, even his constituents, were upset.

      It’s yet another indication of what they’d like to do. The Obama administration probably hasn’t brought it up because there is no interest on bank accounts nowadays…


       
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      snopercod in reply to Henry Hawkins. | March 29, 2013 at 5:49 pm

      Most American citizens voted for Obama.

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