Frightening, frustrating times for Cypriots with no access to their money

Account holders trawl ATMs in search of cash

Protesters raise their open palms showing the word "No" during an anti-bailout rally outside the parliament in Nicosia yesterday.   Cypriot ministers were trying to revise a plan to seize money from bank deposits before a parliamentary vote today  that will secure the island's financial rescue or could lead to its default, with reverberations across the euro zone.  Photograph: Yorgos Karahalis/Reuters

Protesters raise their open palms showing the word "No" during an anti-bailout rally outside the parliament in Nicosia yesterday. Cypriot ministers were trying to revise a plan to seize money from bank deposits before a parliamentary vote today that will secure the island's financial rescue or could lead to its default, with reverberations across the euro zone. Photograph: Yorgos Karahalis/Reuters

Tue, Mar 19, 2013, 00:13


Banks in crisis-ridden Cyprus are not set to open before Thursday, deepening popular desperation and fury over the levy on savings imposed by the troika as part of the price for a rescue package. If adequate funds are not deposited in ATMs today, tempers are certain to rise.

By Thursday, Cypriots will have had no access to their money for six frightening, frustrating days.

Yesterday Cypriots went from ATM to ATM in search of cash. The machine at the branch in my neighbourhood of the troubled Laiki Bank was doling out €200 to greatly relieved customers. At branches of Bank of Cyprus, the country’s largest lender, a flashing notice on the screen apologised in Greek, English and French and no funds were available at other branches of the Laiki Bank.

Ithica Fruiteria, a local greengrocer, was busy with Cypriots buying fresh vegetables, wine, and bread for the vegan feast that ushers in the Orthodox lenten fast. Costas, at the till, said if the banks did not open for business today, the shop could face difficulties with both cash flow and too much cash on hand for safety.

Since 2011, when Cyprus became caught up in the global economic meltdown, the incidence of house-breaking, bank robberies, and thefts from convenience stores and shops has been on the rise.

Credit and debit cards still function and will take over for cashless Cypriots until the banks resume operations. Many businesses may not open. Cypriots are holding on to their money until they see whether they will face a haircut of deposits plus considerably higher taxes or the collapse of Laiki Bank and the Bank of Cyprus.

Before this crisis, about a quarter of the shops along Makrios Avenue, the main commercial thoroughfare in Nicosia, had closed due to the economic slump, while unemployment, normally around 2 per cent, had risen to 15 per cent.

As he hurried into parliament yesterday President Nicos Anastasiades was greeted by a chorus of “No” – “ Oxi, Oxi, Oxi ” – from a few protesters waiting beside the bust of Mahatma Gandhi. Some held banners reading, “Hands Off Cyprus!” and “Europe is for its people not for Germany”.


Merkel blamed
Most Cypriots blame German chancellor Angela Merkel for the Troika’s decision to impose a levy on bank deposits, starting from €1.

But one optimistic woman remarked, “In 1974, we fled the north with only the clothes we were wearing when the Turkish army invaded. We rebuilt and recovered. They may take our money now, but at least we have homes and clothes. We will recover again.”

President Anastasiades’ Democratic Rally party is negotiating with its coalition partner, the Democratic Party, which does not like the EU’s harsh terms for the bailout. Their combined strength should be 28 in the 56-member parliament but two members of the smaller party oppose the deal.

The government and the bankers are trying to come up with new numbers to ease the pain of the majority of Cypriot small depositors, who have less than €100,000 in their accounts, without driving away those who have large sums in the banks.

The latest figure being bandied about is a 3 per cent levy on deposits under €100,000 and a 12.5 per cent levy on deposits higher than that. There is also a rumour that no levy will be imposed on deposits of €20,000.

Of the €70 billion in Cypriot banks, about half belongs to Cypriots and residents, including some Russians and Britons, and half to non-residents.

According to some estimates, Russian banks hold €9.2 billion and corporations €14.2 billion.