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March 28th, 2013 
Peter Nolan
Posted
Cyprus banks have reopened under armed guard after a long lockdown, with harsh curbs on withdrawals to stop depositors punished by a eurozone bailout from draining the island’s coffers dry.
Bank tellers urged customers not to take out their frustrations when the doors swung open at noon (local time) on Thursday for the first time in 12 days, while authorities trucked in shipping containers full of euros under heavy security.
World markets were jittery over the crisis, which has seen capital controls imposed for the first time by a eurozone economy in order to prevent financial meltdown after the 10-billion-euro EU-IMF rescue package.
Most banks in Nicosia had between one and three guards posted at their entrances early morning, some of them carrying weapons – an alien sight in the generally peaceful east Mediterranean tourist destination.
Banks opened unusually late to allow time to prepare for the new cash curbs and are set to stay open for six hours until 6pm (local time).
Cypriot authorities appealed on television late Wednesday for people to give priority to the elderly as many did not have credit cards and had to withdraw their money over the counter.
How the bailout unfolded:
March 16, 2013: Cyprus becomes the fifth nation to ask for a eurozone bailout.
March 17, 2013: The Cyprus government delay a planned emergency session of parliament. Banks remained closed.
March 19, 2013: Cypriot MPs reject the bailout terms. More than 50 per cent voted against a bank levy and 19 abstained. Cyprus turns to Russia for help and sources suggest they could approach Middle East investors.
March 20, 2013: Cyprus Central Bank announces banks would remain closed until the following week. The government rushes to create Plan B while the finance minister asks Russia for a further 5 billion euros.
March 21, 2013: The European Central Bank issued Cyprus a deadline of 25 March warning that unless an EU-IMF programme was in place it would cut off its emergency liquidity assistance.
March 22, 2013: proposals for a bank levy are returned to the table suggesting a levy of 10 per cent on deposits exceeding 100,000 euros. The Cypriot parliament backed the plan.
March 24, 2013: The country’s two biggest banks ration the amount of money savers can withdraw on a daily basis. Cyprus was warned that unless it bowed to demands it faced leaving the eurozone.
March 25, 2013: a last-minute 10-billion euro bailout was agreed. The deal will safeguard small savers, inflict heavy losses on uninsured depositors and ensure the country remains in the eurozone.
March 27, 2013: The Bank of Cyprus refuses to accept the resignation of its chairman and four other board members. People of Cyprus protest outside parliament.
March 28, 2013: Banks expected to re-open. Locals describe the mood on the streets as “like a warzone” as withdrawal limits of 300 euros are set.
Authorities imposed severe restrictions to prevent a run on the banks that could wreak havoc on the island’s already fragile economy, with daily withdrawals limited to 300 euros.
The restrictions – which last for a week before they are reviewed – also ban the cashing of cheques and ordered those travelling abroad not to take more than 1,000 euros out of the country.
Under a deal agreed in Brussels on Monday, Cyprus must raise 5.8 billion euros to qualify for the full 10-billion-euro loan from the troika of the European Union, European Central Bank and International Monetary Fund.
Depositors with more than 100,000 euros in the top two banks – Bank of Cyprus and Laiki or ‘Popular Bank’ – face losing a large chunk of their money.
Five shipping containers reportedly filled with billions of euros were delivered to the central bank late Wednesday, an AFP photographer said. A helicopter and police cars accompanied the cash convoy.
Banking employees union ETYK said staff were ready to go back to work but urged the public not to blame them for the tight controls.
Unlike in other European countries Cypriot tellers are not housed behind glass barriers.
“We must all keep in mind that as bank employees, we are not responsible but on the contrary colleagues are themselves victims of criminal acts and/or omissions that led to this destruction and many are in a very tragic situation,” said an ETYK union statement.
AFP
Topics:
international-financial-institutions,
business-economics-and-finance,
international-financial-crisis,
event,
banking,
industry,
cyprus
Source Article from http://www.abc.net.au/news/2013-03-28/banks-reopen-in-cyprus-under-armed-guard/4600848
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