Cyprus Banks: Customers Face Transaction Limits

Cyprus' president has admitted an EU bailout deal for the nation to stave off bankruptcy was "painful" but the best under the circumstances.

Nicos Anastasiades said the island will introduce some limits on transactions to prevent an outflow of money when its banks reopen - due on Thursday - but the measures will be "very temporary".

Banks have been closed since March 16 to avert a run on deposits as the country's politicians struggled to come up with a plan that would raise enough funds to qualify for an international bailout.

In a televised address to the country, the president said: "The central bank will implement capital controls on transactions. I want to assure you that this will be a very temporary measure that will gradually be relaxed".

He did not specify what limitations would be imposed on transactions.

Angry Greek Cypriots have taken to the streets

He said he had taken "painful decisions to save the country from bankruptcy" and pledged Cyprus "would find its feet again".

It follows a bailout deal which reports suggest could see Bank of Cyprus savers with deposits above 100,000 euros (£85,000) hit with a levy of "around 30%".

The banks were shut down more than a week ago to prevent a run, as international lenders struggled to agree on a plan to raise funds so the island could qualify for a bailout package.

For the Popular (Laiki) and Bank of Cyprus, restrictions on a 100 euro (£85)-a-day withdrawal limit from cashpoints will remain in force until Thursday, a central bank source official said.

Earlier, a government official confirmed the depositors' levy of around 30% - a major blow to savers, many of whom are Russian.

A Laiki bank employee. There are fears about the impact in coming years

Laiki, the second-largest bank, will effectively be shut down and split into a "good bank" and a "bad bank" as part of the bailout deal, which was designed to avert a eurozone exit.

President Anastasiades tweeted that he was "content" before flying home from marathon Brussels talks that sealed the agreement in the early hours of Monday, which briefly rallied European markets before dealers began to fret about the cost of the deal.

Mr Anastasiades, who reportedly threatened to resign during the tense negotiations, will have to convince his people the deal was needed, when many fear it will plunge the country into recession.

Maria Constantinou has worked for Laiki since joining as a teenager in 1988. Her husband works at the same bank, they have four children and now face financial ruin.

She told Sky's Tom Parmenter: "I still cannot believe what happened we have loans to repay, we have the children to help them study to the universities.

"We don't know what to do - everything has changed."

There have been protests on the streets in recent days amid fears of the impact on the country's economy in the next few years.

The agreement, reached before a Monday deadline set by the European Central Bank, unlocks 10 billion euros (£8.5bn) in emergency loans from the EU, European Central Bank and International Monetary Fund.

"We believe that this will form a lasting, durable and fully financed solution," IMF chief Christine Lagarde said.

After the eurozone's finance ministers' approval, several national parliaments, such as Germany's, must also approve the bailout deal, which might take another few weeks. EU officials said they expect the whole programme to be approved by mid-April.

Cyprus' outsized banking sector was crippled by exposure to crisis-hit Greece and has been used as a haven for foreign funds.

The British arm of Laiki, Laiki Bank UK, said customers could continue to withdraw their cash but warned that large deposits may be at risk.

Laiki Bank UK operates as a branch of its parent and gave clearer guidance on its website on Monday, telling customers they are protected up to 100,000 euros (£85,000) by the Cyprus Deposit Protection Scheme and not the UK's compensation scheme.

Anda sedang membaca artikel tentang

Cyprus Banks: Customers Face Transaction Limits

Dengan url

https://tampolantelak.blogspot.com/2013/03/cyprus-banks-customers-face-transaction.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

Cyprus Banks: Customers Face Transaction Limits

namun jangan lupa untuk meletakkan link

Cyprus Banks: Customers Face Transaction Limits

sebagai sumbernya