Cyprus agreed on Monday to make bank depositors with accounts over 100,000 euros contribute to the financial rescue in order to secure 10 billion euros ($12.9 billion) in loans from the eurozone and the International Monetary Fund. Cyprus needed to scrounge up 5.8 billion euros ($7.4 billion) on its own in order to clinch the larger package, and banks had remained shut for nearly two weeks until politicians hammered out a deal, opening again on Thursday.
But fearing that savers would rush to pull their money out in mass once banks reopened, Cypriot authorities imposed a raft of restrictions, including daily withdrawal limits of 300 euros ($384) for individuals and 5,000 euros for businesses — the first so-called capital controls that any country has applied in the eurozone's 14-year history.
The rush didn't materialize as Cypriots appeared to take the measures in stride, lining up patiently to do their business and defying dire predictions of scenes of pandemonium.
Under the terms of the bailout deal, the country' second largest bank, Laiki — which sustained the most damaged from bad Greek debt and loans — is to be split up, with its nonperforming loans and toxic assets going into a "bad bank." The healthy side will be absorbed into the Bank of Cyprus.
On Saturday, economist Stelios Platis called the rescue plan "completely mistaken" and criticized Cyprus' euro partners for insisting on foisting Laiki's troubles on the Bank of Cyprus.
AP business correspondent Geir Moulson in Berlin and APTN reporter Adam Pemble in Nicosia contributed.
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