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| Cyprus banks reopen amid tight security and tough curbs | Cyprus banks reopen amid tight security and tough curbs |
| (about 1 hour later) | |
| Banks in Cyprus have reopened after a two-week closure amid EU-IMF bailout talks, with orderly queues for cash and strict limits on daily withdrawals. | |
| Branches were replenished with cash overnight and police were deployed amid fears of a run on the banks. | Branches were replenished with cash overnight and police were deployed amid fears of a run on the banks. |
| Some queues did form but the mood was calm, and the country's president thanked Cypriots for their "maturity". | |
| The restrictions on the free movement of capital represent a profound breach of an EU principle, correspondents say. | The restrictions on the free movement of capital represent a profound breach of an EU principle, correspondents say. |
| However, the European Commission on Thursday justified the move, saying the "stability of financial markets and the banking system in Cyprus constitutes a matter of overriding public interest". | However, the European Commission on Thursday justified the move, saying the "stability of financial markets and the banking system in Cyprus constitutes a matter of overriding public interest". |
| Information from the Central Bank of Cyprus released on Thursday showed that foreign depositors had already withdrawn 18% of their cash from the nation's banks during February, before the current crisis hit home. | |
| Cyprus is the first eurozone member country to bring in capital controls. | Cyprus is the first eurozone member country to bring in capital controls. |
| Cyprus needs to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for a 10bn-euro bailout from the European Commission, European Central Bank and the International Monetary Fund, the so-called troika. | Cyprus needs to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for a 10bn-euro bailout from the European Commission, European Central Bank and the International Monetary Fund, the so-called troika. |
| As part of the bailout plan, depositors with more than 100,000 euros will see some of their savings exchanged for bank shares. | As part of the bailout plan, depositors with more than 100,000 euros will see some of their savings exchanged for bank shares. |
| An earlier plan to tax small depositors was vetoed by the Cypriot parliament last week. | An earlier plan to tax small depositors was vetoed by the Cypriot parliament last week. |
| Loss of trust | Loss of trust |
| Branches began to open at noon local time (10:00 GMT) and will close at 18:00 (16:00 GMT). | Branches began to open at noon local time (10:00 GMT) and will close at 18:00 (16:00 GMT). |
| Some did not open on time, causing tension among customers. The longer queues formed outside branches of Laiki, which is being wound up. | |
| One customer in a queue in Nicosia told the BBC's Tim Willcox he was withdrawing the allowed daily amount of 300 euros ($383; £253) but would take out all of his money if he could. | One customer in a queue in Nicosia told the BBC's Tim Willcox he was withdrawing the allowed daily amount of 300 euros ($383; £253) but would take out all of his money if he could. |
| Our correspondent says the predictions of a stampede did not materialise and in some places there were more journalists than depositors. | Our correspondent says the predictions of a stampede did not materialise and in some places there were more journalists than depositors. |
| Another customer, jewellery shop owner, Roula Spyrou, told AFP news agency: "There's going to be queues so I'm not going to spend so many hours there to get 300 euros." | Another customer, jewellery shop owner, Roula Spyrou, told AFP news agency: "There's going to be queues so I'm not going to spend so many hours there to get 300 euros." |
| As it became clear that calm was being maintained, President Nicos Anastasiades tweeted his gratitude. | |
| "I would like to thank the Cypriot people for their maturity and collectedness shown in their interactions with the Cypriot Banks," he wrote. | |
| Some armed police have been deployed in cities and hundreds of staff from the private security firm G4S are guarding bank branches and helping to transport money. | Some armed police have been deployed in cities and hundreds of staff from the private security firm G4S are guarding bank branches and helping to transport money. |
| The stock exchange, shut since 16 March, remains closed on Thursday and will not reopen until after Easter. | The stock exchange, shut since 16 March, remains closed on Thursday and will not reopen until after Easter. |
| In a statement issued on Wednesday, the ministry of finance insisted the capital control measures were temporary and were needed to "safeguard the stability of the system". | In a statement issued on Wednesday, the ministry of finance insisted the capital control measures were temporary and were needed to "safeguard the stability of the system". |
| It read: "The Central Bank of Cyprus and the government of Cyprus will review them each day, with a view to progressive lifting of the measures as soon as circumstances allow. " | It read: "The Central Bank of Cyprus and the government of Cyprus will review them each day, with a view to progressive lifting of the measures as soon as circumstances allow. " |
| The severe new rules have been imposed to prevent a torrent of money leaving the island and credit institutions collapsing. | The severe new rules have been imposed to prevent a torrent of money leaving the island and credit institutions collapsing. |
| As well as the daily withdrawal limit, Cypriots may not cash cheques. | As well as the daily withdrawal limit, Cypriots may not cash cheques. |
| Payments and/or transfers outside Cyprus via debit and or credit cards are allowed up to 5,000 euros per person per month. | Payments and/or transfers outside Cyprus via debit and or credit cards are allowed up to 5,000 euros per person per month. |
| Transactions of 5,000-200,000 euros will be reviewed by a specially established committee, with applications for those over 200,000 euros needing individual approval. | Transactions of 5,000-200,000 euros will be reviewed by a specially established committee, with applications for those over 200,000 euros needing individual approval. |
| Travellers leaving the country will only be allowed to take 1,000 euros with them. | Travellers leaving the country will only be allowed to take 1,000 euros with them. |
| Many economists predict the controls could be in place for months. | Many economists predict the controls could be in place for months. |
| The unprecedented restrictions represent a profound breach of an important principle of the European Union, says the BBC's economics correspondent Andrew Walker. | |
| That principle holds that capital, as well as people and trade, should able be to move freely across internal borders, he says. | |
| However, the European Commission said member states could introduce capital controls "in certain circumstances and under strict conditions on grounds of public policy or public security". | However, the European Commission said member states could introduce capital controls "in certain circumstances and under strict conditions on grounds of public policy or public security". |
| But it added that "the free movement of capital should be reinstated as soon as possible". | But it added that "the free movement of capital should be reinstated as soon as possible". |
| The vice-president of the Cypriot Employers Federation, Demetria Karatoki, told the BBC he believed the country could pull through. | The vice-president of the Cypriot Employers Federation, Demetria Karatoki, told the BBC he believed the country could pull through. |
| "Although there is going to be hardship, at the end of the day we can start rebuilding our economy on a sound basis," he said. | "Although there is going to be hardship, at the end of the day we can start rebuilding our economy on a sound basis," he said. |
| But British Cypriot businessman, Costa Thomas, said he had lost faith in the system. | But British Cypriot businessman, Costa Thomas, said he had lost faith in the system. |
| "No-one really trusts politicians. So why should we believe them that these controls are going to last only a few weeks and we're going to get shares and get the money back?" he asked. | "No-one really trusts politicians. So why should we believe them that these controls are going to last only a few weeks and we're going to get shares and get the money back?" he asked. |
| One employee of the Bank of Cyprus told the BBC that everybody's jobs were at risk. | One employee of the Bank of Cyprus told the BBC that everybody's jobs were at risk. |
| "If the Bank of Cyprus collapses, all the small business, the large businesses, everything collapses. They cannot buy anything, import anything, export anything. There is nothing," she said. | "If the Bank of Cyprus collapses, all the small business, the large businesses, everything collapses. They cannot buy anything, import anything, export anything. There is nothing," she said. |