BREAKING ALERT! CHAOS IN CYPRUS: “Thousands” Are Withdrawing Their Money
An elderly woman leaves the bank as another man leaves the ATM machine in Nicosia, Cyprus (AP)
– Nervous depositors in Cyprus have rushed to ATM machines to drain
their accounts following a bailout agreement with international
creditors that includes a levy on all the country’s bank accounts. Lines
formed at many ATMs as people scrambled to pull their money out after
word that the 10 billion euro (£8.6bn) rescue package Cyprus agreed with
its euro area partners and the International Monetary Fund included
one-off levy on deposit, an unprecedented step in the eurozone crisis.
The levy is expected to raise 5.8 billion euro.
European officials said people with less than 100,000 euro in their
accounts will have to pay a one-time tax of 6.75%, those owning more
money will lose 9.9%. Cypriot bank officials said that depositors can
access all their money except the amount set by the levy.
But that hardly assuaged people who continued to withdraw cash
from ATMs until the machines ran out, unsure what or how much would be
taxed. Officials said that withdrawing funds on Saturday would not
reduce anyone’s levy.The country’s co-operative banks also shut their
doors after depositors scurried in hopes of protecting their savings.
Unlike commercial banks which remain closed on weekends, co-operative
banks customarily open for business on Saturday. ”Politicians and senior
bank bosses have covered each other’s backs for years, now it’s
ordinary people who are paying the price and are being punished,” said
Christos Demetriades, 58, milling outside a shut Nicosia co-operative
bank branch.Cyprus’ Finance Minister Michalis Sarris defended the
decision to accept the levy, saying it was either that or a complete
economic meltdown. “This was the least worst option,” he told state
broadcaster CyBC. “We battled to prevent the country from completely
going bankrupt.” News of the levy came as a shock to most people
following strict assurances from Cyprus’ President Nicos Anastasiades
that he would not accept a deal which required depositors to share in
the losses. Government spokesman Christos Stylianides said Cypriot
officials had resisted intense pressure to accept a deposit levy of a
whopping 40%. Bank bosses are meeting with Central Bank officials to
figure out their next steps, while Mr Anastasiades, who returns to
Cyprus Saturday evening has called for a meeting of party leaders to
assess the unfolding situation.
- Cypriots rue bailout deal’s bank deposit levy (miamiherald.com)
- Cypriots scramble for their cash as bail-out levies 10% on all bank deposits (standard.co.uk)
- Bailout Cuts Cyprus Bank Accounts, Withdrawals Barred ( aworldchaos.wordpress.com)