Banks in Cyprus have reopened for the first time in almost two weeks. Despite the fact that strict limits have been imposed on withdrawals, long queues had formed in front of many banks before they opened their doors..
Amid fears of a run on the banks, the lenders reopened on Thursday under restrictions unprecedented in the eurozone of 17 nations that use the euro common currency.
Among other things, account holders are to be allowed to withdraw no more than 300 euros ($383 ) per day until further notice. Other restrictions include a limit on credit or debit card use abroad of 5,000 euros per month and Cypriots will be allowed to carry no more than 1,000 euros with them in cash when they leave the country.
Overnight, container trucks reported to be filled with billions of euros in cash had left the airport at Larnaca and rolled up to Cyprus' central bank in Nicosia. Security was tight for the operation, with a helicopter hovering above the convoy and police armed with rifles stationed around the central bank's compound. The funds, which reportedly were sent by the European Central Bank (ECB) late on Wednesday, are meant to ensure that Cyprus' banks can meet what is expected to be the extremely high demand for quick cash, despite the imposed restrictions.
Police were also to be placed on high alert ahead of the opening of the banks in order to ensure the security of not only the banks, but customers leaving with cash in their pockets.
"We have taken all necessary measures to ensure that people will be protected," Andreas Angelides, a spokesman for the Cypriot police force said. "We urge everyone to be more alert [than usual] when they leave the bank."
Finance Minister Michalis Sarris had pledged that those restrictions will be temporary, but on Wednesday he told the Cypriot private television station Sigma that despite that things were bound to get worst before they get better.
"We will see worse days in 2013... the economy will go into deeper recession."
Also unprecedented is the fact that depositors with more than 100,000 euros in Cypriot bank accounts are to be forced to foot some of the 5.8 billion euros that the government had to come up with to secure a 10-billion-euro bailout from the "troika" of the European Union, European Central Bank and International Monetary Fund. Last week, parliament voted down an original bailout package that would have seen a minimum 6.75 percent levy imposed on all Cypriot accounts, no matter how small.
A few hours before the banks were to reopen, a spokesman for the country's credit unions appealed for calm.
"I am telling people: Don't panic, don't panic! Everyone will get what they have coming to them," he said.
pfd/hc (Reuters, AFP,dpa)
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