Excerpts from the Guardian:
Meanwhile Cyprus's parliament has postponed an
emergency session due to take place on Sunday to discuss the levy on
bank savings. All meetings have been put off until Monday, according to
the Cyprus News Agency.
Earlier the Cypriot president, Nicos
Anastasiades, had delayed an informal meeting of politicians after
growing unrest following the news of the one-off levy.
the fifth country to have asked for aid from the eurozone, but this is
the first time a deal has called for savers to sacrifice some of their
cash holdings, in what is seen as a dangerous precedent.
agreement also called for a 2.5 percentage point increase in corporation
tax, a bank restructuring and exchanging bank bonds for less valuable
Sharon Bowles, chair of the European parliament's economic
and monetary affairs committee, said she was appalled by the Cyprus
bailout. "This grabbing of ordinary depositors' money is billed as a
tax, so as to try and circumvent the EU's deposit guarantee laws," she
said. "It robs smaller investors of the protection they were promised.
If this were a bank, they would be in court for mis-selling."
bailout, agreed by eurozone ministers and the International Monetary
Fund, was needed to prevent Cypus defaulting on its debts. The island
ran into trouble after its banks were hit by a restructuring of Greece's
The Cypriot finance minister, Michael Sarris,
said after 10 hours of talks which ended with the agreement: "I wish I
was not the minister to do this. Much more money could have been lost in
a bankruptcy of the banking system or indeed of the country."
But the news led to frenzied attempts by Cypriots to withdraw money from their bank accounts on Saturday.
rushed to banks and queued at cash machines that refused to release
cash as resentment quickly set in. The levy on savers, half of whom are
thought to be non-resident Russians, will raise almost €6bn. The move in
the eurozone's third smallest economy could have repercussions for
overstretched bigger economies such as Spain and Italy.
with less than €100,000 in their accounts will have to pay a one-off tax
of 6.75%, Eurozone officials said, while those with greater sums will
The prospect of savings being so savagely docked
sparked terror among the island's resident British community. At the
Anglican church's weekly Saturday thrift shop gathering in Nicosia,
Cyprus's capital, expats expressed alarm, with many saying that they had
also rushed to ATMs to withdraw money from their accounts.
a run on banks. A lot of us are really panicking. The big fear is that
there soon won't be cash in ATMs," said Arlene Skillett, who lives in
Nicosia. "People are worried that they're automatically going to lose
10% [of their savings] in deposit accounts. Anastasiades won elections
saying he wouldn't allow this to happen."
She said a lot of
elderly Britons had transferred savings to the island when they decided
to retire there. "Nobody can understand how they can do this – isn't it
illegal? How can they just dock money from your account?" she asked.
the coastal town of Larnaca, Cypriots described how they had queued
from the early hours in the hope of withdrawing deposits from banks.
lot of us just can't believe it," said Alexandra Christofi, a divorcee
in her 40s who said she had rushed to her bank before doors opened at
"I had put my money there for a rainy day. It's absolutely
all I have and I cannot understand how Cyprus is being singled out.
Other EU countries got bailouts and we're only in this position because
we supported Greece," she said, referring to the massive losses the
Cypriot banking system suffered as a result of Greece's restructuring
its debt last year. "Where is the fairness in that? Where is the
solidarity and support that is meant to be the reason why we are all
unified in this common currency in the first place?"
Zembyla, from Nicosia, said the levy would make a "big dent" in her
family's savings and erode investors' confidence. "It is robbery. People
like us have been working for years, saving to pay for our children's
studies and pensions and suddenly they steal a big share of this money.
Russians that currently keep the economy afloat will leave the country
along with their money," she added.
Howard Skelton, in Limassol,
said: "The only people who will benefit in the long term are the banks.
It will be many years before the man in the street begins to feel any
benefit from this bailout. The sooner I can return to the UK the
The levy does not take effect until Tuesday, following a
public holiday, but action was being taken to control electronic money
transfers over the weekend. Co-operative banks, the only ones open in
Cyprus on a Saturday, closed following a run on the credit societies
while ATMs cancelled transactions owing to "technical issues".
started queuing early to withdraw their cash, and protesters gathered
outside the presidential palace. "I'm extremely angry. I worked years
and years to get it together and now I am losing it on the say-so of the
Dutch and the Germans," said British-Cypriot Andy Georgiou, 54, who
returned to Cyprus in mid-2012 with his savings.
"They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple," said a pensioner.
IMF managing director, Christine Lagarde, who attended the meeting,
said she backed the deal and would ask her board in Washington to
contribute to the bailout.
"We believe the proposal is sustainable
for the Cyprus economy," she said. "The IMF is considering proposing a
contribution to the financing of the package. The exact amount is not