With the decision that banks in Cyprus will open again tomorrow Thursday, March 28th 2013, a legislation on capital control restrictions has been leaked to the press Wednesday afternoon although the official decree by the Central bank is still due.
UPDATE 20:30 pm
– withrawals per person per day from each bank owner has account will be limited to 300 euro.
– capital restrictions will be imposed for four days (via SigmaLive)
The capital controls aim to avoid a massive transfer of money outside the country and a bank run, after the bank in Cyrpus have been closed for a week.
The restrictions are allegedly to start Thursday and be valid for one week.
Kathimerini Cyprus has seen a copy of the legislation. Here are some of the key points.
1. Ban on checks being cashed, although they can be deposited into accounts.
2. The transfer of money abroad is not allowed unless it is to pay for imports that carry necessary documentation and for accommodation and tuition costs for Cypriots studying abroad. They must be full-time residents on the island.
The limit for students abroad is 10,000 per quarter.
Spending on credit cards abroad is limited to 5,000 euros per month per person.
3. Time deposit accounts cannot be redeemed before maturity.
4. Those leaving the country will not be allowed to carry more than 3,000 euros in cash on them per trip. This also applies to other countries [currencies].
5. Any transactions, transfers or payments that have not been completed before the decree is issued are subject to capital controls.
6. The capital controls apply to all accounts, payments and transfers, regardless of currency used.
*some more details have being posted in Cypriot daily Fileleftheros (via zerohedge.com) and SigmaLive this information seems to be the draft of the decree.
Local media report that banks in Cyprus will open to the public from 12 o’clock noon until 6 p.m., tomorrow thursday.
PS Bannig free move of capital and goods? If these are the capital restrictions after rescuing Cyprus, I wonder how would they look like if the country had rejected the Eurogroup proposal and had gone default.
see also: SigmaLive
The Cyprus situation is no different from the Irish situation a few years back. Through the IFCD, the Irish government allowed foreign financial houses free reign in their dodgy dealings, with only an appearance of regulation. As a direct result of that, the Irish Joe Soap, just like the Greek and Cypriot Joe Soap will be paying through the nose, for years to come. Who are the culprits?
Sahra Wagenknecht, German MP
Prof Hendrik Enderlein, Political Economist
These are quotes from an article that appeared in one of Irelands daily newspapers, shedding some light on the lead-up to the Irish banking debacle. An article
giving a picture of
the then Irish Minister for Finance described the actions of his government as guaranteeing the cheapest bank bailout in history. At this stage of the game, the Irish taxpayer is down 86 billion euro and has, through direct and inderect taxation, imposed auterity and more loans from the international loan sharks known as IMF, been endebted for no les than 42% of the TOTAL EUROPEAN BANK DEBT. A debt, in case you need reminding, which was run up by PRIVATE companies.
If I tried even a fraction of that as a private businessman I would be in jail for reckless trading, and barred from ever running a company again. The bankers responsible for this debalce are still getting paid 500k per annum and bonusses will into the millions. Not to mention handsome pension arrangements and “expenses”.
But Joe soap has access to his meagre few Euro restricted, just in case he try something they don’t like…