News / Europe

Cyprus Banks to Remain Closed Until Thursday

A trader looks at his screen on the IG Group trading floor in London March 18, 2013. The surprise decision by eurozone leaders to partially fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets on Monday.
A trader looks at his screen on the IG Group trading floor in London March 18, 2013. The surprise decision by eurozone leaders to partially fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets on Monday.
VOA News
Cyprus banks will remain closed until Thursday to prevent a run on accounts as the Mediterranean island nation considers imposing a first-ever bank deposit tax.

The proposed bank levy has rattled investors. Stock markets throughout the world dropped Monday in the aftermath of the bailout for tiny Cyprus. Stocks in Asia plunged two percent or more, with European and U.S. indexes falling by smaller amounts.

The proposed bank tax would hit everyone with money in Cypriot banks, including foreign nationals.

Cyprus moved to revamp terms of the bank deposit tax imposed by its international lenders as part of a $13 billion bailout to keep from going bankrupt.

Cypriot officials were working with the lenders to cut or eliminate the tax on small investors, while raising it on those with bigger accounts. For the second day in a row, Cyprus's parliament postponed a vote on a new plan and rescheduled it for Tuesday.

  • Bank of Cyprus employees sit in front of riot police during a protest outside Greece's Finance Ministry as the bank remains closed for third day in central Athens, March 21, 2013.
  • People line up at an ATM outside a closed Laiki Bank branch in Nicosia, Cyprus, March 21, 2013.
  • Employees of the Bank of Cyprus take part in a rally in solidarity with Cyprus outside the headquarters of the bank in Athens, Greece, March 20, 2013.
  • International Monetary Fund mission chief Delia Velculescu arrives for a meeting with Cypriot President Nicos Anastasiades at the presidential palace in Nicosia, Cyprus, March 20, 2013.
  • A man walks by graffiti that reads "Troika out" in the old city of capital Nicosia, Cyprus, March 19, 2013.
  • Demonstrators raise their arms in protest as Cypriot President Nicos Anastasiades's convoy drives to the parliament in Nicosia, Cyprus, March 18, 2013.
  • A protester shouts slogans outside of parliament during a meeting in Nicosia, Cyprus, March 18, 2013.
  • Cypriot President Nicos Anastasiades arrives at parliament in Nicosia, Cyprus, March 18, 2013.

Cypriot banks were closed on Monday for a holiday.

Cypriots were angered by the deposit tax, with one domestic worker saying it is unacceptable.

"We cleaning ladies spend our entire days trying to earn some money in order to feed our children, and now they are saying they are going to take it from us?" one woman said.  "It's unacceptable. No. Not a single haircut, we will not accept any kind of haircut.''

Under bailout terms set Saturday by Cyprus's eurozone neighbors and the International Monetary Fund, a one-time tax of 9.9 percent would be imposed on deposits of $131,000 and up, while deposits under $131,000 would be taxed at 6.75 percent.

Analyst Robert Halver of the Baader Bank said the fear is that depositors throughout the eurozone might view the Cyprus experience as reason to start withdrawing their funds from bank accounts. Such a run on banks could create a new crisis for European governments, now in the third year of their debt crisis.

"What has been done in Cyprus is an experiment," Halver said. "If the population has to, in the form of their savings, contribute to rectify the mistakes that have been made in Cyprus, then there is a danger that in other countries people will decide, at the breakfast table, to withdraw their money. If money is withdrawn on a great scale, if we have a bank run, then we see the return of the bank crisis."

Russian President Vladimir Putin on Monday called the proposed levy "unfair, unprofessional and dangerous."  Russian banks and corporations have billions of dollars in Cypriot banks.

Cypriot media say it is unlikely lawmakers will agree to the terms set in the bailout.  

President Nicos Anastasiades said in a televised address to the nation Sunday if parliament does not approve the levy, Cyprus faces bankruptcy and the possible exit of Cyprus from the eurozone.


Watch related video

Related Video of Cyprus Situationi
X
March 18, 2013 3:23 PM
Residents of Cyprus are angry that their bank deposits are subject to a one-time tax levy as part of a bailout deal for the cash-strapped island. Eurozone finance ministers and the International Monetary Fund included the levy as part of a deal to give Cyprus $13 billion to avoid bankruptcy. News of the tax plan sent stocks tumbling Monday in Asia.

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

This forum has been closed.
Comment Sorting
Comments
     
by: DAVID LULASA from: tambua,gimarakwa,hamisi,v
March 19, 2013 6:29 AM
cyprus government should not lose hope even when they havent used the money and see if there are no profits to be realised from the loan...i wonder who has told them that they wont make a profit and hence the need for cypriots account holders to pay for the loan?.

lulasa...president

by: NVO from: USA
March 18, 2013 7:34 PM
The Global Elites plan of the NEW WORLD ORDER is to make you become CONDITIONED to their EVIL plan.............A ONE WORLD GOVERNMENT, RIGGED MARKETS, MICROCHIPPING OF CITIZENS, EUGENICS and WAR. The Bilderberg group headed by the ROCKEFELLERS and the ROTHSCHILDS are the ones to EXPOSE! “The process in which the frequency or predictability of a behavioral response is increased through reinforcement (i.e., a stimulus or a reward for the desired response). Classical, or respondent, conditioning, which involves stimulus substitution, is based on the work of Ivan Pavlov, who conditioned dogs by ringing a bell each time the aroma of food was presented. Eventually the dogs salivated when the bell rang, even if no food odor was present; salivation was thus the conditioned response.”

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Islamic State Prisoners Talk of Curiosity, God, Regreti
X
Zana Omer
March 28, 2015 1:19 AM
The Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Islamic State Prisoners Talk of Curiosity, God, Regret

The Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Germanwings Findings Raise Issue of Psychological Testing for Pilots

More is being discovered about the co-pilot in the crash of Germanwings Flight 9525 in the French Alps. Investigators say he was hiding a medical condition, raising questions about the mental qualifications of pilots. VOA's Carolyn Presutti reports.
Video

Video Hi-tech Motorbike Helmet's Goal: Improve Road Safety

In cities with heavily congested traffic, people can get around much faster on a motorcycle than in a car. But a rider who is not sure of his route may have to stop to look at the map or consult a GPS. A Russian start-up company is working to make navigation easier for motorcyclists. Designers at Moscow-based LiveMap are developing a smart helmet with a built-in navigation system, head-mounted display and voice recognition. Zlatica Hoke has more.
Video

Video New Wheelchair Is Easier to Use, Increases Mobility

Traditional push-rim wheelchairs create a lot of stress for arm, shoulder and neck muscles and joints. A redesigned chair, based on readily available bicycle technology, radically increases mobility while reducing the physical effort. VOA’s George Putic reports.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video Virginia Tavern Takes Patrons Back to Medieval Times

European martial arts are not widely practiced and are unknown by most people. A tavern in Old Town Alexandria, outside Washington, wants to change this by promoting these fighting techniques from medieval times. Through combining visual arts, martial arts and culinary arts, this tavern brings medieval history back to life. VOA's Yang Lin and Helen Wu report.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More