News / Europe

In Cyprus, The Bank Run That Wasn't

Depositors wait to enter a branch of Laiki Bank in Nicosia, March 29, 2013.
Depositors wait to enter a branch of Laiki Bank in Nicosia, March 29, 2013.
Reuters
In the end it was hardly even a stroll, let alone the widely predicted run on the banks of Cyprus.

Commentators had been confident that as soon as the banks reopened on Thursday at noon after Cyprus signed a rescue deal with the European Union to stave off national bankruptcy, there would be scenes of chaos.

The experts were right, but it wasn't the Cypriots causing the pandemonium.

Television crews from around the world crowded into tiny Eleftheria Square in central Nicosia, the convenient location of two of the capital's main banks.

If there were a dozen Cypriots waiting patiently to make a withdrawal, there were probably twice as many cameramen, each one as frenzied as the local people were calm.

People sit at a cafe at a central square in Nicosia, March 29, 2013.People sit at a cafe at a central square in Nicosia, March 29, 2013.
x
People sit at a cafe at a central square in Nicosia, March 29, 2013.
People sit at a cafe at a central square in Nicosia, March 29, 2013.
Reasons for this fortitude are not hard to find in conversations with residents of Nicosia, a sunny and welcoming city with a vibrant cafe culture.

The Greek Cypriots describe themselves as more laid back than their cousins in Greece, where the reaction to the austerity decreed in their own EU rescue deal was mayhem on the streets of Athens.

While a bomb did explode on the day the Cyprus banks ended their two-week closure, the explosion actually happened in Greece.

Cypriots say that they have endured worse, harking back to the war in 1974, when the island was divided after a Turkish military invasion.

Jean Kelly-Christou, editor-in-chief of the Cyprus Mail, the island's oldest newspaper, said people were drawing on the lessons of the economic crisis that followed the war.

"I think most people are being pragmatic about it and understand that demonstrations and anger might make things worse," said Kelly-Christou, who is Irish.

Strict Regime

A strict regime of restrictions on bank transactions, including a daily limit of 300 euros on withdrawals, has been imposed this week, in what is commonly described as an unprecedented move.

Cyprus Bailout

  • Agreed to on March 25
  • Worth $13 billion
  • Keeps Cyprus in the eurozone
  • Closes the island nation's second largest bank - Laiki Bank
  • Laiki accounts larger than $130,000 will be moved to a "bad bank" and used to raise bailout money
  • Laiki accounts with less than $130,000 euros will be moved to Bank of Cyprus
  • Bank of Cyprus will be restructured
Unprecedented in the short history of eurozone bailouts perhaps - but Cypriots recall they had to endure years of currency controls after the 1974 war.

In any case, much of the anger in Cyprus was probably expended before the deal was done in Brussels on Monday.

An initial version envisaged levying a tax on all bank deposits, large and small, and that infuriated small savers on the island. The final agreement, which only hit those with more than 100,000 euros in the bank, was better received.

The restrictions on bank transactions may also have helped calm the mood. After all, if people can't withdraw more than 300 euros a day, it is difficult to have a full-scale bank run.

Most people do not have 100,000 euros in the bank in any case and were taking comfort from the fact that deposits below that level are protected by insurance.

A woman waits for the opening of a branch of Laiki Bank in Nicosia, March 29, 2013.A woman waits for the opening of a branch of Laiki Bank in Nicosia, March 29, 2013.
x
A woman waits for the opening of a branch of Laiki Bank in Nicosia, March 29, 2013.
A woman waits for the opening of a branch of Laiki Bank in Nicosia, March 29, 2013.
Many of those waiting in line for the banks to reopen were in fact elderly people who had run short of ready cash. They said they were uncomfortable with bank cards and so unable to use the ATMs that had remained in operation throughout.

Others probably realised that they had just as much chance of getting their money later rather than on day one.

"We were planning to take our money out but we're going to wait ... it's going to be chaos today," Constantina Economidou, a civil servant, said on Thursday.

High Finance

Others were equally resigned, or perhaps numbed by the sensation that there were matters of high finance under way which they could not do much about.

"The government hasn't told us exactly what's happening so people don't know how to react," said Patra Michaelides, 45, a teacher. "We're at a loss. Should I be hopeful or worried?"

Theodora Kyprianou 72, who owns a souvenir shop stacked high with unsold T-shirts, hats and souvenirs of Cyprus, said the general calm when the banks reopened did not surprise her.

"We're civilized here - what did people expect? The problem isn't big - it's very big. But what can we do about it," she asked with a shrug.

Cyprus President Nicos Anastasiades addresses a conference of civil servants in Nicosia, March 29, 2013.Cyprus President Nicos Anastasiades addresses a conference of civil servants in Nicosia, March 29, 2013.
x
Cyprus President Nicos Anastasiades addresses a conference of civil servants in Nicosia, March 29, 2013.
Cyprus President Nicos Anastasiades addresses a conference of civil servants in Nicosia, March 29, 2013.
There is also national pride at work. President Nicos Anastasiades praised his compatriots for their maturity and responsibility, while ordinary people said they had posted messages on Facebook urging Cypriots not to give the foreign media the satisfaction of seeing the country unravel.

"You may have the euros, but we have the culture," said the front page headline in the daily Politis, above photos of people queuing outside banks.

There have been street protests, but they have been limited in scope and certainly not violent.

"Cypriots are non-violent by nature. Just take a look at the vandalism and street protests in Greece. You have none of that here. This is a completely different mentality," said political scientist Hubert Faustmann of the University of Nicosia.

He said Cyprus was a small country, and if you took to the streets in protest, "you could be taking it out on your neighbor's brother-in-law."

"Also, there is a realisation that deep down, things were not perfect here," he said of a country whose overgrown banking sector was eight times the size of its economy.

You May Like

Tired of Waiting, South Africans Demand Change ‘Now’

With chronic poverty and lack of basic services largely fueling recent xenophobic attacks, many in Rainbow Nation say it’s time for government to act More

Challenges Ahead for China's Development Plans in Pakistan

Planned $46 billion in energy and infrastructure investments in Pakistan are aimed at transforming the country into a regional hub for trade and investment More

'Forbidden City' Revisits Little Known Era of Asian-American Entertainment

Little-known chapter of entertainment history captured in 80s documentary is revisited in new digitally remastered format and book More

This forum has been closed.
Comment Sorting
Comments
     
by: NVO from: USA
April 01, 2013 12:48 AM
Then, when the Fed’s fire hoses started spraying an elephant soup of liquidity injections in every direction and its balance sheet grew by $1.3 trillion in just thirteen weeks compared to $850 billion during its first ninety-four years, I became convinced that the Fed was flying by the seat of its pants, making it up as it went along. It was evident that its aim was to stop the hissy fit on Wall Street and that the thread of a Great Depression 2.0 was just a cover story for a panicked spree of money printing that exceeded any other episode in recorded human history.

by: jkjk:l from: cYPRUS
March 31, 2013 1:08 PM
Large and corrupt governments love to use the magic of the false choice. For instance, “…it is better to sacrifice some of your money and your principles to the establishment than it is to live through total collapse of the nation…” This false choice process, though, never ends. The offending government will demand more property and more freedom from the citizenry everyday while constantly warning that if we do not submit, the alternative will be “far worse”.

The truth is, Cyprus is not the issue. What the disaster in Cyprus reflects, however, concerns us all. It is a moment of precedence; an action which sets the stage for the final destruction of the idea of private property. It dissolves one of the final barriers to total government control. Governments and elitists have always stolen from the public through misspent taxation and rampant inflation, but with Cyprus, we see a renewed feudalistic paradigm. The EU and the banking hierarchy are sending a message to the Western world: You are now their personal emergency fund, and nothing you own is actually yours anymore.

by: nvo from: USA
March 31, 2013 1:06 PM
Just to be clear, any sizable Russian funds being stored in Cyprus were removed before the bailout measures were instituted. Therefore, the assertion that such people were “punished” is a lie and a distraction. The Russian scapegoat was merely being promoted by global financiers and political elites in order to con people around the world (not just those in Cyprus) to accept the concept of government theft of private funds as being “moral” under “certain extraneous circumstances”. When a government wants you to set aside your conscience in support of an immoral action that serves their interests, they will almost always conjure a false villain and engineered consequences for you to direct your fear and anger at. Once they can convince you to abandon your own principles to smite an imaginary enemy or avoid a manufactured threat, even if only one time, it will be much easier for them to convince you again a second time.

by: VOA from: LIES!
March 31, 2013 12:55 PM
Realizing the insanity of their solution – and sensing a popular revolt – the EU and Cyprus’ government switched to a second version of insanity. They revised the terms of their heist. Now the first 100,000 euros ($130,000) in savings would be exempted. But anyone with a larger bank account could lose 30% to 40%.

You can imagine the rage from Russian millionaires — and the terror struck into the hearts of every single person, rich or poor, across Europe who lives under the increasingly powerful, unaccountable, whimsical rule of politician-bankers. Let’s call those rulers “banksters,” because after their Cyprus raid, that’s just accurate.

Remember, this theft was excused because Cyprus’ depositors weren’t really Cypriot. But after the banksters got away with this without riots, they realized they had a new, lucrative model. And so the Dutch chairman of the eurozone — the countries that use the euro — told reporters that raiding bank accounts of savers could be repeated across Europe, in places like Italy and Spain, too.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Cinema That Crosses Borders Showcased at Tribeca Film Festivali
X
April 24, 2015 4:09 AM
Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.
Video

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.
Video

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.
Video

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.
Video

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.
Video

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.
Video

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.
Video

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.
Video

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.
Video

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.
Video

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.
Video

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.
Video

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.
Video

Video Keeping Washington Airspace Safe Is Tall Order

Being the home of all three branches of the U.S. federal government makes Washington, D.C. the prime target for those who want to make their messages and ideas heard. Unfortunately, many of them choose to deliver them in unorthodox ways, including from the air, as a recent incident clearly showed involving a gyrocopter landing on the Capitol’s West Lawn. VOA's George Putic has more.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video Hope, Prayer Enter Fight Against S. Africa Xenophobia

South Africa has been swept by disturbing attacks on foreign nationals. Some blame the attacks on a legacy of colonialism, while others say the economy is to blame. Whatever the cause, ordinary South Africans - and South African residents from around the world - say they're praying for the siege of violence to end. Anita Powell reports from Johannesburg.

VOA Blogs