From daily News Line in Britain:
Thursday, 28 March 2013
Bank of Cyprus occupied!
Thousands of Bank of Cyprus employees remained in occupation of the bank’s Nicosia headquarters in defence of their jobs yesterday, after hearing that the ‘restructuring’ agreed in the EU bailout deal involves thousands of bank job cuts.
The occupation began on Tuesday after the country’s largest commercial bank announced plans to take over Laiki Bank, the island’s second largest bank also known as Cyprus Popular Bank.
Cypriot officials said the deal would mean the country would shift its focus away from being an international centre of financial services. That is expected to cost jobs, adding to the unemployment rate which now stands at around 14 per cent.
‘If their only goal right from the start was to destroy the banking sector of Cyprus then it looks like they found the way. After Popular Bank it will be us and even worse after that,’ said Bank of Cyprus employee Panicos Stelaianou.
Bank of Cyprus chairman, Andreas Artemis, and four other board members have resigned, complaining that the government has failed to tell them it was appointing an administrator to oversee the bank’s restructuring.
Nicosia secured a 10-billion-euro bailout deal on Monday from the Troika – the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) – involving a 40 per cent tax on deposits of over 100,000 euros and the shutting down of the Popular Bank.
Cyprus is to impose severe limits on money transfers and withdrawals, while extra security guards are on hand for today, provided the government reopens the banks.
• Following the Cypriot banks’ collapse the Athens stock exchange collapsed by 4.9 per cent last Tuesday and by lunchtime Wednesday it was diving by a further 3.5 per cent.
On Wednesday morning, the Cypriot Finance Minister Mikhalis Sarris stated in a TV programme that one of the reasons for the collapse was that the Cypriot Popular Bank since 2007 made ‘unchecked huge loans’ to Greek companies.
He also said that when he was made head of the bank, the Cypriot Popular Bank was already ‘in tatters’ and he just kept it breathing for the last two years until Cyprus appealed for EU help.
The Greek bourgeois press stated that the EC-IMF-ECB troika will impose over 50 per cent ‘haircuts’ on Cypriot banks’ accounts and also a widespread programme of privatisations and deep wage and pension cuts resulting in very high unemployment.
• Meanwhile, unemployment in France climbed toward a record high in February for the 22nd month running and has reached its highest level since 1997.
The number of registered jobseekers in the eurozone’s second-largest economy rose by 18,400 from January to 3.188 million, the highest since June 1997 and close to the record of 3.196 reached in January of that year.
See also here.
The bailout imposed on Cyprus by the European Union (EU) is a politically criminal act of financial looting, aimed at destroying the country’s banks and reducing the working class to penury: here.
Cypriot youth protest: here.
By Stella Tsolakidou on March 28, 2013:
Cyprus’ Crisis Could Last For Years
The Cypriot banking crisis is yet another blow to the Eurozone system, but it is the Cypriot people who are experiencing the true impact of the embattled banks and the imposed haircut of the Troika.
Some experts claim that the country would be better off if it had exited the Euro and started negotiation about its banks’ future without any promises or commitments.
Most, however, fear that the future seems particularly bleak for Cyprus and the years to come will be harsher than any other Eurozone nation has witnessed before, even Greece, which has undergone three years of big pay cuts, tax hikes and slashed pensions.
In Cyprus though, bank account holders with more than 100,000 euros ($130,000) could lose 80 percent or more of their money as the government is going to confiscate it on the orders of the same international lenders who imposed harsh austerity on Greece.
“Thanks to political mismanagement, we now have a first: capital controls in the Eurozone,” Nicolas Veron, a senior fellow at Bruegel in Brussels and a visiting fellow at the Peterson Institute for International Economics in Washington told the Bloomberg news agencky. “How long is temporary? It could turn out like Iceland, extending to many years.”
Due to the prolonged shutdown of Cypriot banks, competent authorities in Cyprus and Greece [are] getting prepared for possible shortages in basic food sources and medical drugs that are considered irreplaceable. According to a ProtoThema report, the closed banks created conditions of economic suffocation, since Cypriots can now only withdraw cash in dribs and drabs, barely enough to cover their daily needs and businesses have been left without enough money to buy goods, including supermarkets.
Cypriot media reported that some retail businesses are threatened with extinction because consumers have significantly lost much of their spending power, similar to Greece, where more than 68,000 businesses have closed since 2010 when austerity began. The sharp drop in sales has rendered retailers unable to make commission, so that with each passing day more and more shelves are emptied.
Most suppliers do not accept checks and require cash. Gas stations also require cash payment, as well as supermarkets and credit cards are virtually useless and not accepted. A week ago, the President of the Cypriot Supermakets’ Union, Andreas Hatziadamou, had already warned that supermaket stocks are enough for less than a week time. “Unless a solution is immediately found and suppliers do not withdraw their decision of accepting only cash for payments, there will be serious shortages in our supermarkets’ shelves,” he said.
The National Guard is in a dire situation too: just as any other civil servant in Cyprus, they do not know when they will get paid and their families are feeling the consequences. There are currently no other fuel supplies beside the army supplies. All exercises have been cancelled, especially for reservists, who for a number of reasons are not wanted to be armed at the moment, according to a defencenet.gr report.
Employees in private companies will not receive their wages from March, even if the banks open as scheduled on March 28 after being closed since March 15. Employers can not make payments, either because of administrative failures of the banking sector or due to restrictions on withdrawals or the lack of money in their accounts after the haircut on deposits imposed by the Eurogroup.
All bank accounts of more than 100,000 euros in Laiki Bank, which was the commercial bank in Cyprus, will remain in the bank until the final liquidation, and the most optimistic scenario wants beneficiaries to get 20-30% of their deposits back in three or four years.
Before the confiscation, ATM withdrawals were limited to 100 euros ($130) per day. People are facing difficulties with covering their daily needs (food, electricity, telephone, water) making this crisis, economically speaking, as bad as that in 1974 when Turkey invaded and occupied the northern third of the island.
According to a draft presidential decree, as revealed by Kathimerini’s version in Cyprus, a series of strict capital controls will be imposed for at least a week. Bank customers cannot withdraw from savings until their time deposit accounts expire; checks can be deposited but not cash, only 3,000 euros ($3835) per person will be allowed to be taken out of the country, no money can be transferred abroad except for students studying in foreign countries, and that will be limited to 10,000 euros ($13,000) per quarter.
Cyprus banks opened: long queues but no panic, no bank run: here.
Bank workers in Cyprus face the loss of half their pensions: here.
- No run as banks reopen in Cyprus (fsn.typepad.com)
- Cyprus’ President-related company transfers €21 mln to London prior to bailout agreement – report (rt.com)
- You: Bank of Cyprus depositors could lose up to 60% of their savings (guardian.co.uk)
- Cypriot archbishop urges finance minister to quit (jhaines6.wordpress.com)
- Leaked documents accuse elite of pulling millions from Cyprus banks before scandal (express.co.uk)