Here We Go Again…Cyprus Receives Bail-out Protests Begin

Actually this time it’s a little different. Cypriot savers are going to be hit with a levy of up to 10% of their savings in order to help the government of the island avoid a disorderly bankruptcy.

Many Cypriots, shocked that the bailout would force bank depositors to help foot the bill, were seen queuing to withdraw cash.

The parliament is due to meet later on Sunday to vote on the measure.

Mr Anastasiades’ Democratic Rally party – which has 20 seats in the 56-member assembly – needs support from other factions to ratify the bailout.

The deal – reached with Eurozone partners and also the IMF in Brussels late on Friday – marks a radical departure from previous international aid packages.

In a statement on Saturday, President Anastasiades described the deal as choice between the “catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis”.

He said that thousands of small businesses would have gone bankrupt without the agreement.

The Cypriot leader, who was elected last month on a promise to tackle the country’s debt crisis, is due to address the nation later on Sunday.

Nicholas Papadopoulos, who heads the parliamentary financial committee, said his initial reaction to the bailout deal was “shock”.

“This decision is much worse than what we expected and contrary to what the government was assuring us, right up until last night (Friday),” Mr Papadopoulos told Reuters.

Meanwhile, opposition leader George Lillikas has urged his supporters to stage a protest rally on Tuesday, saying that the president:

“Had betrayed the people’s vote”.

People in Cyprus with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said after agreeing the deal.

Those with greater sums will pay 9.9% in tax.

Depositors will be compensated with the equivalent amount in shares in their banks.

Reports suggest that depositors will be able to access all of their money except the amount set by the levy.

The levy itself will not take effect until Tuesday, following a public holiday, but action is being taken to control electronic money transfers over the weekend.

Already people have started queueing to withdraw their cash and there are signs that this is not going to go as smoothly as the government hoped.

One man in Limasoll arrived with a bulldozer saying that if he wasn’t given his cash he would take it himself, it’s believed he was accommodated.

Cyprus is the 5th country to receive a bail out, and all eyes are now on Spain, Italy, Portugal and Ireland where investors may withdraw their cash incase a similar levy is imposed on them.