Heralding the beginning of the bailout, Cypriot President Nicos Anastasiades addressed a nation braced for traumatic changes.
The deal struck in Brussels provides 10 billion euros needed to rescue the economy but it comes at a high price to Cypriots. Small savers will not face a levy but those with over 100,000 euros could lose up to 30% of their balances. Cyprus’ largest bank, Laiki, will be closed and deposits moved to the Bank of Cyprus.
The President was at pains to explain that the glass was half full.
“Cyprus was one step away from financial collapse, our choices were not easy and the environment was not ideal but after tough negotiations, with persistence and also a sense of responsibility, we have reached a result that ensures this country’s future.”
During the televised address he also announced that controls restricting movement of money would be introduced as a temporary measure as banks reopen on Tuesday. This is to prevent a bank run as many search for alternative locations for their savings.
He also said that welfare payments will be met, which will provide little comfort to a nation facing a deep recession.