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Cyprus crisis: the changes which have struck the island

Updated on June 23, 2013
Source

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

Source

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.

Source

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.

Human rights!!!

Don't you agree that people should have the right to vote for measures which concern their own life long savings?

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Cyprus map

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    • maxoxam41 profile image

      Deforest 4 years ago from USA

      Italy, Spain, Portugal, Ireland, now Cyprus it is our future if we don't take control of our government by rioting and voting out governments that don't act for our interests.

      Cyprus is not an experience. It was experienced by the countries I cited precedently. Now the IMF and co will come into action and cease national assets to the detriment of the people. The people will suffer the consequences od their negligent government. When one government fails, it is the fault of the government. When several fails, it is a pattern therefore a conscious move to destroy a country and harvest the benefits.

      Let's not be fools. It was announced by the first failure. Was it Spain? Iceland controlled the damages done by its banks few years ago. Everybody that was involved was incriminated and jailed.

      Wasn't the government experimented insider trading? By transferring/investing their capital to another secured bank before the debacle isn't it a form of insider trading?

      OFF WITH THEIR HEADS!

      Now, as Naomi Klein wrote in her book "the shock doctrine", it is the "awe and shock" stage, where people are afraid of the uncertainty of their future, where all the vultures will ask from them financial cuts and sacrifices policies, at our most vulnerable point, BUT IT IS WHERE WE SHOULD REFUSE THEIR POLICY AND FIGHT.

    • breakfastpop profile image

      breakfastpop 4 years ago

      This is a nightmare, an absolute nightmare.

    • Chris Achilleos profile image
      Author

      Chris Achilleos 4 years ago

      @breakfastpop and @maxoxam41

      Many thanks to both of yo for reading and commenting. This matter is just horrible for the island. There have been strikes every single day since the decisions have been announced, people are hoping that if they stand up for their selves something might change. However, no one knows!

    • Eiddwen profile image

      Eiddwen 4 years ago from Wales

      I think that breakfastpop has said it all in that it is' indeed an absolute nightmare'!!!

      Thanks for sharing and voted up.

      Eddy.

    • Chris Achilleos profile image
      Author

      Chris Achilleos 4 years ago

      I couldn't agree more. I've got family members and friends who are currently losing their jobs or getting cut offs even on their salaries. Others are losing 30% of their life long savings, it's horrible.

      Thank you for stopping by to read Eddy. Your comments and votes are truly appreciated.

    • aviannovice profile image

      Deb Hirt 4 years ago from Stillwater, OK

      This is worse that the US stock market crash of 1929. People panicked and withdrew their money, which definitely contributed to what was happening on the cash front, Sounds like your country is in a horrid state of affairs, and you are all prisoners of your government's desires. I hope that you see relief soon, for it is horrid not to know the truth.

    • Chris Achilleos profile image
      Author

      Chris Achilleos 4 years ago

      Thank you for your wishes aviannovice. I couldn't agree more that we are currently "prisoners of our government's desires", as you have stated.

      Thanks again, for your supporting comments.

    • Dim Flaxenwick profile image

      Dim Flaxenwick 4 years ago from Great Britain

      Thank you for making clear some of the aspects I just couldn´t get from the newsreels.

      Excellent, interesting hub.

    • Chris Achilleos profile image
      Author

      Chris Achilleos 4 years ago

      Hi Dim, thank you for your comments. I am very glad that I could offer a better understanding of what is currently happening in Cyprus, at least to some extend. People are really starting to suffer. And something just tells me that this is just the beginning of our suffering.

    • James-wolve profile image

      Tijani Achamlal 4 years ago from Morocco

      I hope things will be better soon in Cyprus.I really like this country so much.It is so beautiful in every aspect.It saddens me to see this beauty debauched and things run amok there.

      Many blessings to you!

    • Chris Achilleos profile image
      Author

      Chris Achilleos 4 years ago

      Thank you so much James. I hope things get better too... There are many limitations on the money flow and several companies are now closing due to what is happening. Its really sad to see such a beautiful place getting worse each passing day.

      Thanks for stopping by,

      Take Care!

    • surfgatinho profile image

      Chris Leather 4 years ago from Cornwall UK

      Looks like another case of the prudent having to pay for the profligate ways of others. I know that part of the pressure from the EU was because much of the money in Cypriot accounts was 'hot' Russian money, but these are exactly the people who will have got their money out in plenty of time.

      I did hear a well put argument from another perspective though. If Cyprus wasn't in the Euro then it's currency would have been depreciated by at least what people have lost in this move.

      Who knows, but I know how I'd feel if a chunk of my savings went this way...

    • Chris Achilleos profile image
      Author

      Chris Achilleos 4 years ago

      I did hear this as well. However there also those who say that if Cyprus wasn't in the Euro then the Cypriot pound would have had much more value now. But I think we can't really be sure of anything. The whole situation really is disappointing, especially for those who have had part of their money taken away as well as for the people who have lost their jobs. As you have already said, in situations like these its the people that pay for others mistakes.

      Thanks for reading surfgatinho, your comments are appreciated!

      Chris

    • Indian Chef profile image

      Indian Chef 4 years ago from New Delhi India

      Europe is going through recession and many countries are going down. Started with Greece, then it spread to Portugal and Italy and now it is in Cyprus. The recent sudden downfall in gold prices is probably because of this only. Interesting Hub.

    • Chris Achilleos profile image
      Author

      Chris Achilleos 4 years ago

      People are wishing that this situation does not become any worse. But the way things are developing, no one knows.

      Thank you for reading and commenting Chef.

      Have a nice day,

      Chris

    • othellos profile image

      Mario Psomas 2 years ago from Europe

      Very well presented. The Cyprus experiment will affect a lot of other European countries to say the least that might face the same economic crisis.

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