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Cypriot Banks Set to Reopen
March 28, 2013 7:10 am
Last Updated: December 24, 2013 9:13 am
Cyprus will open its banks, which have been shuttered for days as the nation set a deal with the European Union, European Central Bank and International Monetary Fund for a bailout. Depositors with the largest balances will carry the heaviest load for a “tax” meant to move their savings to the government’s treasury.Source: Thinkstock
Other conditions of the bank reopenings are just as draconian. Depositors will only be allowed to withdraw 300 euros, barely enough for many people to cover a week’s expenses. This money could be held hostage for an indefinite period while Cyprus tries to salvage itself financially. And the restrictions will bring consumer and business to a screaming halt, which is guaranteed to do damage to gross domestic product.
According to Reuters:
Authorities say the emergency rules imposed to limit withdrawals and prevent a bank run will be temporary, but economists say they will be difficult to lift as long as the economy is in crisis.