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article imageCyprus banks to reopen Tuesday, capital controls in place

By Katerina Nikolas     Mar 25, 2013 in Business
Nicosia - Local banks in Cyprus will reopen on Tuesday with a cap on withdrawals to prevent a bank run. Capital controls were approved last week by the Cypriot parliament.
Proto Thema reported Cyprus Interior Minister Socrates Hasikos confirmed Monday morning that local banks will reopen tomorrow.
Government spokesman Christos Stylianidis said he estimated that the haircut on uninsured bank deposits above €100,000 will be around 30 percent or less. As Digital Journal reports the deposit tax levy only applies to accounts held in the Bank of Cyprus and the Laiki. A limit of €120 has been placed on ATM withdrawals in an effort to prevent a bank run.
The negotiations which eventually resulted in a Cypriot exit from the euro being averted were fraught. DW reported Cyprus President Nicos Anastasiades told the troika "I make you one proposal - you say no. I propose you another proposal and you say no - what more do you want? Do you want me to resign? Then just say."
An option which was not given consideration was swapping the euro currency to the Turkish lira used in the northern part of the island. Turkey's EU Minister Egemen Bağış said "Turkey would support an eventual transition to the use of the Turkish Lira in Greek Cyprus" Hurriyet Daily reported.
Turkey has been making waves over the last week over the Cypriot banking crisis. As Cyprus attempted to broker a deal with Russia last week over financial aid in exchange for future rights over Cypriot gas, the Turkish Foreign Ministry said: "The idea that the natural resources of Cyprus can be used as collateral in Solidarity Fund or any other form of borrowing that could be discussed in the context of the current economic crisis, without taking into account the inherent rights of Turkish Cypriots - co-owners of the island-is a dangerous manifestation of fantasy as the sole owner of the island and could lead to a new crisis in the region." (Ekathimerini)
However the aspiring EU member nation did not offer any immediate finance to resolve the banking problem in the eurozones Cyprus.
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