Cyprus adventures through times
0 Comment(s)
Print
E-mail Xinhua, April 1, 2013
His then Finance Minister Charilaos Stavrakis maintained that Cyprus would be untouched by the crisis, even when the country was warned of the dangers of its oversized banking system, about 8.5 times larger than the annual 17.5-billion-euro (22.4 billion-U.S. dollar) economic turnover of Cyprus.
Critics accused the Cypriot government of having delayed so much that it gave the opportunity to the troika to step up its demands on Cyprus
Deposits in Cypriot banks amounted to 67.5 billion euros in February, more than 60 percent of them classified as domestic and the rest foreign with an estimated 20 billion euros coming from Russian investors and depositors.
About 38 billion euros are in deposits of over 100,000 euros, which are uninsured under Cypriot -- and European -- legislation.
The two largest lenders, Bank of Cyprus and Cyprus Popular Bank, exposed themselves to the Greek debt after buying large quantities of bonds even at a time when German banks were trying to get rid of them. The two banks lost an estimated 5 billion euros from the 74-percent haircut on the Greek debt, forcing Christofias to seek bailout.
OPTIMISTIC ABOUT FUTURE
Banks in Cyprus reopened for business on Thursday with remarkably few people lined up outside -- to the relief of authorities which have feared a run on the banks following a closure since March 16.
"This is a new period that starts in Cyprus from today. People are in shock. They are very worried. But I think they will realize from today what actually happened in our lives," artist Elena Christodoulidou told Xinhua at the Evanthous Street branch of Cyprus Popular Bank in central Nicosia.
She is optimistic about the future. "I don't want to lose my hope. I think this country is a beautiful country. A restructuring is needed. And I hope better days will come, but completely in a different, different way," she said.
Christodoulidou expects the big change which is happening in Cyprus to bring the best results for its people, especially for the young generation.
The Cypriot government announced on Saturday that depositors of over 100,000 euros in the Bank of Cyprus will have their money initially slashed by 37.5 percent and will get category-A shares in compensation, meaning that they will become new holders of the bank's equity.
A further 22.5 percent of big deposits will be blocked for 90 days to cover recapitalization as needs arise. The remaining 40 percent will not be subject to any haircut, but will be blocked until the recapitalization is made final.
And now what?
Cypriots have a reputation of tenacity in the face of adversity and of being hard workers. Most people believe the island will be soon on its feet. Its spiritual leader, Archbishop Chrysostomos, says that despite difficult days ahead it will take only some years for the economy to stand on its feet.
Former Central Bank Governor Afxentis Afxentiou estimated that the current nightmare will be a thing of the past in three years.
Go to Forum >>0 Comment(s)