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December 9, 2022

Cyprus making ‘superhuman’ effort to reopen banks

The financial crisis in Cyprus has worsened with workers threatening to strike just 24 hours before the banks are due to re-open, BBC informs. Workers’ union has said its members are prepared to cause branch closures almost as soon as they resume for business on Thursday. The head of the Cypriot central bank, Panicos Demetriades, has said that “superhuman” efforts are being made to open the country’s banks today. Banks in the country have been shut for more than a week as a controversial bailout was negotiated, which will see depositors take losses. “We have to restore the public’s trust in banks,” Panicos Demetriades said. Private security firm G4S is responding to extra demand by the banks by posting an extra 180 of its employees both outside and inside branches from tomorrow until order is restored to the banking sector, according to cyprus-mail.com.Banks have not been open since 15 March.

Their reopening had been expected after Cyprus agreed a deal with the International Monetary Fund (IMF) and the European Union (EU) that releases EUR 10 bn in support. The central bank governor was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank. The apparently erroneous statement led to demonstrations and calls for his resignation from Bank of Cyprus staff. Finance Minister Michalis Sarris told in interview with state television that uninsured savers at the country’s second biggest bank, Laiki or Popular bank, faced losses of up to 80 percent on deposits over 100,000 euros.

The Cypriot authorities had previously said all that but the biggest two banks would open on Tuesday, but they have remained shut while the finer details of capital controls are handled by the Cypriot central bank.Meanwhile, the chief executive of the biggest bank in Cyprus has been sacked at the behest of the country’s international lenders, state media has said.

Yiannis Kypri and his board of directors were removed at the request of the European Union, European Central Bank and International Monetary Fund, the Cyprus News Agency says. The bank will be restructured and merged with the “good” parts of Laiki Bank, which is being shut down. Also, on Tuesday, Bank of Cyprus chairman Andreas Artemis handed in his resignation, along with four other directors, but the bank’s board rejected the resignations.


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