Cyprus crisis: the changes which have struck the island
Latest decisions which have affected the island: March 2013
- The islands second largest bank (LAIKI) is closing down
- Cut offs of 30% from all bank accounts exceeding the amount of 100 thousand euros
- Withdraw limits of 250 euros per day
- Travelers leaving the country are only allowed to hold 1000 euros maximum
Queues at ATM's
Banks remained closed
All banks in Cyprus remained closed for a period of 12 days. Absolutely no one could access or take money out of the bank during this period, and there was a limit on the amount of money people could withdraw.
When the banks had reopened their doors the security staff only allowed five people to be in the bank at a time. The past two weeks have been chaotic. There were statements made that Cyprus was facing bankruptcy, which if did turn out to happen would have had tragic results for the island, such as euro exit.
Cut offs and restrictions!
Although it has managed to avoid bankruptcy for the moment, it turns out that it’s second largest bank, “Laiki”, is going to practically get divided. One part of the bank will join another Cypriot Bank, the Bank of Cyprus. Therefore all accounts within Cypriot banks above the amount of 100 000 euros, will be facing cut offs. According to reports made, cut offs could reach 30% or in 40% in extreme circumstances. Those however, who have accounts under 100.000 euros will not be affected. The second part of Laiki Bank, an amount of 9,2 billion euros, will be frozen for now.
For a while now bank account holders were closing Cypriot bank accounts and transferring their money to other countries. So, it was foreseen that more people would want to withdraw money out of their bank accounts or take it out of the country. Therefore, more drastic “temporary” restrictions were made in order to save the islands economy. Not a single traveler can now leave the country with more than 1000 euros cash and the maximum which is allowed to withdraw from accounts is 250 euros per day. The country will also be receiving a loan of approximately 10 billion euros.
Unfortunately, it appears that people were not allowed to have a say in all this. The government had decided for them without taking into consideration the people's rights. Cypriots feel like they have been robbed, robbed from their own government, or if you like sold out. Try to imagine all those people who had been saving money for a life time and were sure that their money was secure in the bank. Now they are about to lose a large amount of their own money in order to pay for the governments mistakes, while politicians appear to have transferred their own money out of the country. It is unfair and justice is wanted. Cypriots have been striking in the streets, mostly blaming the government or the euro zone while others supported euro exit. The amount of support which the island received from citizens of other countries was extremely high, as large amounts of people were striking for the Cypriots all around Europe.
Cyprus Crisis: Bankers Clashing With Riot Police
Was the government aware of what was coming?
The president reassures that Cyprus has no intention of exiting the Euro and that the issue has been contained. Meanwhile he blamed others for forcing Cyprus to turn into an experiment, and made it clear that the country will not allow any experimenting with its future.
More recent investigations have revealed that most politicians, including the president, may have been aware of the measures which were made as it was found that they had transferred their money to other countries only two days prior the incident; one politician alone had removed an amount of 21 million euros. As a result they may all be required to pay a great amount of money for fines.
Fear and anger is spread among citizens!
The news has been spread out all over the world. Things appear to have drastically changed for Cyprus these past two weeks; no one knows what the next day might bring. Most people are scared of this change, they are afraid of not knowing what will come next. Feelings of fear, distress, and anger have been spread among the people as well as the investors of the island.
Many Cypriots may loose many of their long life savings whereas numerous investors may lose billions. Citizens have already begun to experience cutoffs from their salaries, as well as losing their jobs due to what is currently happening. There are also those who fear a rise in the amount of robberies as a large percentage of people are withdrawing money everyday and keeping it at their homes. Tension is high. The island, unfortunately, is not how people knew it.