icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
28 Mar, 2013 20:08

President slashes own wages as Cypriots face €300 daily cash limit

President slashes own wages as Cypriots face €300 daily cash limit

Cypriots queue for banks, which reopened after 12 days Thursday, as President Anastasiades cuts own wages by 25%. The Cypriot foreign minister promises banking restrictions will be lifted in “about a month”.

A European Central Bank (ECB) spokesman confirmed that 5 billion euros were flown into Cyprus from Germany late Wednesday in time for the reopening of the banks on Thursday,

The ECB bailout plan, which gives Cyprus a €10 billion lifeline, has meant Cypriots have had to impose financial restrictions on their own people, as part of the €5.8 billion levy they have to fund themselves to get the loan.

In practice these impose severe limits on how much money ordinary Cypriots are allowed to access and are the first time they have been imposed in the Eurozone.

Cypriots are allowed to withdraw €300 per person, per day, per bank. If a Cypriot citizen leaves the country, they can’t take out more than €1,000 and if they are abroad and want to use their credit cards, the maximum they can use is €5,000.

The Cyprus foreign minister, Ioannis Kasoulides, said Thursday that he expects capital controls to be fully lifted "in about a month".

While the Cypriot president, Nicos Anastasiades, announced Thursday that he was cutting his salary by 25% in a show of solidarity with his hard up compatriots. Mr Anastasiades' Cabinet ministers have also decided to slash their own wages by 20 per cent.

People queue up outside a Laiki bank branch in the Cypriot capital, Nicosia, on March 28, 2013, as they wait for the bank to open after an unprecedented 12-day lockdown (AFP Photo / Patrick Baz)

'Why do they cut from simple people?'

As banks in Cyprus reopened Thursday, after almost two weeks of closure, queues formed as people tried to get out what little money they were allowed to.

People standing patiently outside the banks seemed calm enough but under the surface bubbles a deep unease and dissatisfaction, reports RT’s Tesa Arcilla in Nicosia, the Cypriot capital.

While European leaders may think they have saved Cyprus from bankruptcy, that is not what many people in Cyprus think, says Arcilla.

Leonides Argyrides, an unemployed, single parent who is also caring for his sick mother is proof that ordinary Cypriots are already bearing the brunt of their country’s bailout deal with the ECB.

“I feel ashamed that I live on the pension of my mum. You make plans for the future, young and old people, and suddenly you hear that the economy of your country and your bank system has collapsed,” he said.

His mother’s pension has been reduced from €1,189 to just over €1,000 a month.

“Why do they cut from simple people, people who are paralyzed?” he said.

At one of the protests gripping the country Wednesday, employees of the Bank of Cyprus, the country’s largest lender, gathered to vent their anger that the bank may be about to collapse and that they will lose their jobs. 

The demonstrators held banners saying “Troika go home”, while another had an image of Cyprus as a map in the sights of a riffle and read simply “target practice”, next to a picture of Angela Merkell sporting a Hitler type moustache in army fatigues.

“I believe its Germany’s fault because we’re a small economy, they felt that the consequences would be minimal, what they don’t know is that a precedent has been set and what happened today in Cyprus can easily happen tomorrow to Italy, to France,” said one protester.

There is also bitterness among some that when Cyprus entered the European Union in 2004; the country paid money to the EU to help the other poorer nations of Bulgaria and Romania, who were joining as part of the same wave.

Away from the streets of Nicosia, the reverberations of the Cyprus banking crisis are already being felt across Europe.

The Eurozone president, Jeroen Dijsselbloem, caused havoc in the markets earlier in the week, when he said that the Cypriot template may be used to deal with other failing banks throughout the euro zone, which includes imposing losses on insured bank depositors, Matthew Dalton, a correspondent for the Wall Street Journal told RT.

“You’re playing with fire when you try and impose this kind of solution in a crisis. The approach in Ireland at the start of the crisis was that every single bank liability was guaranteed at the start. There’s a massive difference from what they did in Ireland and what they have done in Cyprus,” said Dalton.

People queue up outside a Laiki bank branch in the Cypriot capital, Nicosia, on March 28, 2013, as they wait for the bank to open after an unprecedented 12-day lockdown (AFP Photo / Patrick Baz)