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Cyprus re-opens the banks


All calm as banks open their doors

THE FEARED stampede on banks when they reopened yesterday after two weeks of crisis never materialised with queues remaining moderate and the public waiting calmly and patiently for up to an hour to enter the guarded premises.

Long queues formed early although the banks were not due to open until noon but by early afternoon the queues were gone. The banks closed at 6pm with not a single incident reported islandwide. 

Private security at each branch were only allowing up to five people inside the banks at a time and early on, priority was being given to the elderly. 

Bank staff turned up for work early as cash was delivered by armoured trucks. 

According to Reuters, the European Central Bank flew €5.0 billion to the island late on Wednesday. An ECB spokesman said the bank notes came from its logistical reserves, which were stored by Germany’s Bundesbank on behalf of the ECB.

The fact that temporary capital restrictions were in place as of yesterday also helped prevent a run on deposits as withdrawals were limited to €300 per person per day. 

Authorities say the emergency rules imposed to limit withdrawals and prevent a bank run would be temporary, initially for seven days.

Later yesterday however Foreign Minister Ioannis Kasoulides said the capital controls might not be fully lifted for a month.  "A number of restrictions will be lifted and gradually, probably over a period of about a month according to the estimates of the central bank, the restrictions will be fully lifted," Kasoulides told reporters. 

A police source told Reuters that passengers leaving Cypriot airports were subject to extra searches due to the €1,000 limit on taking cash abroad. Notices at Larnaca airport warned travellers of the new restrictions and officers had orders to confiscate cash above the limit.

Most of the morning before opening their doors yesterday, bank staff carefully studied the capital controls so customers could be correctly informed. Yiannos Louras, a cashier at Laiki (Popular) Bank said that although nothing was clear yet, he was preparing himself for a very long day. “We hope the public understands we are doing our best to serve them,” he told the Cyprus Mail.

The capital controls decree was taped to the windows of bank branches and staff handed out copies to customers.  Many of those waiting in line were elderly people, who said they had run out of cash because they did not have bank cards.

Pensioner Froso Kokikou, waiting in line at a branch of Laiki told Reuters: "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? This is what they imposed on us and we have to live with it."

For 63-year-old, Stamatia Kyrillou it was a matter of staying positive and working harder to get out of the crisis. “We have accepted the situation and the controls that have been put in place apply to everyone so all we can do is hope they are sorted out as soon as possible,” she told the Mail. “Cyprus has been in difficult situations before and the only way to get out of it is to work harder and hope not too many people will be laid off,” she added.

President Nicos Anastasiades, party leader and the banks lauded the "maturity and responsibility" shown by Cypriots in the face of the crisis, and especially the calm dignity they displayed yesterday.

"We have shown that not only do we want to drag our country out of this difficult position, but that we will do it," a statement Anastasiades’ office said.

Also yesterday the government said it had appointed a panel to investigate the banking meltdown and look into claims of junior bondholders. "It will have a broad mandate," said Constantinos Petrides, under-secretary to the Cypriot president. "It will investigate criminal, civil and political responsibilities."

The cabinet said that in addition to the fact that Anastasiades had taken a 25 per cent pay cut, ministers' pay would go down by 20 per cent, and they would not be paid a 13th salary.

It also emerged yesterday that a lot of money had already left the island in February. Figures published by the central bank showed that savers from other eurozone countries withdrew 18 per cent of their deposits from the island in February, as talk of a tax on bank accounts gained ground.



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