Agreeing to a ten-billion euro bailout means that people with more than 100,000 euros in a Cypriot bank account will have some of it taken away. The percentage of the levy has not yet been decided.
It is not only the super-rich who are affected. Architect Michael Orphanides has saved over 200,000 euros for his retirement.
“You don’t save your money to the end of your life and then suddenly have it taken away from you. This is daylight robbery – in its worst form,” complained Orphanides.
“Nobody knows at this present time whether it’s going to be a 40 percent, a 60 percent or a 65 percent haircut. This is the range they are talking about. I understand that it’s going to be decided in the next few days.
“I am completely helpless. All these events are beyond my control. And yet we have to pay our hard earned money to bail out the banks and the politicians here,” he said.
The Cyprus bank bailout
- The bailout will mean a significant restructuring of Cyprus’ banking sector
- The country’s second largest bank, Laiki bank, will be split into two parts, a “bad bank” and “good bank”, before being closed, incurring thousands of job losses
- Deposits in Laiki bank of less than 100,000 euros (effectively the “good bank”) are insured by EU law and will be transferred to the country’s biggest bank, Bank of Cyprus
- Deposits in Laiki bank of more than 100,000 euros are not insured by EU law and will be put into the “bad bank”
- Deposits in this “bad bank” and deposits of more than 100,000 euros in Bank of Cyprus will be frozen and used to pay Laiki’s debts and recapitalize Bank of Cyprus. These uninsured depositors will have to face forced losses of up to 40% on their deposits