Cypriots have congregated outside the presidential palace in Nicosia in protest, after a Greek newspaper published the draft proposals on the island’s capital control plans.
According to the report Cyprus is to limit the amount individuals can take out of the country to 3,000 euros and suspend the cashing of cheques.
Businesses that need to transfer funds overseas to pay for imports will be allowed, only if they fulfill strict government requirements.
As well as anger against the government and the banks Cypriots are furious with the EU:
“Why are we angry? Because this is not a Europe of solidarity, this is not a Europe of support. This is not the Europe we believed in,”
explained one woman.
The Cypriot Central Bank has announced banks will reopen on Thursday after pulling down the shutters to avoid a run on cash.
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