Business

Bailout blues: Cyprus in grips of austerity

Cypriots waited on long lines yesterday to withdraw money from banks that had been shuttered for nearly two weeks as lawmakers hammered out a $13 billion bailout to prevent financial collapse.

Depositors, starved for cash to pay for food or rent or just desperate to move it to safer ground, were only allowed into banks a few at a time to prevent chaos.

Some people expressed anger, sadness and disgust at the sad state of things — but aside from some jostling and the occasional harsh words, calm prevailed, according to reports from the island nation.

“I feel a sense of fear and disappointment having to queue up like this; it feels like a Third World country,” 64-year-old pensioner Froso Kokikou told Reuters. “This is what they imposed on us and we have to live with it.”

“How can they tell you that you can’t access your own money in the bank? It’s our money, we are entitled to it,” Kostas Nikolaou, a 60-year-old pensioner said.

Indeed, the bailout prevented financial collapse, but conditions requiring massive losses for large depositors of the country’s two biggest banks are expected to destroy the island’s once-thriving banking industry.

The bailout will lead to losses of as much as 80 percent for accounts over the $130,000 insurance limit at the second largest bank, Popular Bank, and losses of roughly 40 percent for similar-sized deposits at the largest bank, Bank of Cyprus.

Meanwhile, Cypriots have been limited to a measly $383 daily withdrawal as part of strict controls put in place to protect against a run on the banks.