17 Mar 2013

Cyprus bailout: 'people are panicking, they're afraid of losing their money'

Under the palm trees of Larnaca's waterfront promenade, George Kyprou was staring out to sea and scratching his head. "I don't know what to do," he said. Like most Cypriots, he was astonished to wake up one bank holiday weekend morning to discover the government had seized up to 10% of everyone's savings from their bank accounts without warning.

cyprus atm

Kyprou, 62, born in Larnaca, had worked most of his life as a chauffeur and driver in England, proudly buying his London council flat and scrimping to put aside money in Cyprus for when he returned for holidays and eventually to retire. "I'd put aside £50 here, £20 there, all my life," he said. Over decades, he had built up around €6,000 (£5,200) in a Larnaca account. "It was a state building society; I assumed it was safe." But now, as depositors holding less than €100,000 are made to pay 6.75% and those with more than €100,000 9.9% as part of a €10bn (£8.7bn) bailout agreed in Brussels, Kyprou stands to lose €400 overnight. "That's a lot for someone like me," he said.

When he heard the news on Saturday morning, he rushed to the cashpoint and queued with others who were panicking and trying to take out as much money as they could. The media reported a run on ATMs that were depleted by mid-afternoon. But with Cyprus taking immediate steps to prevent any money transfers over the weekend, ordinary savers realised there was little they could do to lessen the blow.

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