Cyprus Causes much Anguish Amongst Depositors
As the world economy crashes and crumbles, Cyprus’ market becomes a sight to see. People who invested in the bank with amounts above ten thousand Euros are expected to lose sixty percent of their wealth, as reported by BBC News on 30th of March. The report further talked about how major stakeholders would find their savings as loan payoffs. This news came in just after a bailout deal of around 5.8 billion Euros was agreed upon in Brussels by the European Union, International Monetary Fund and Cyprus officials themselves.
This has wreaked massive havoc within not only the major investors, but the countries surrounding Cyprus as well. Recent riots have left the country’s economy in shambles. The extent can be seen by the point of no return that was declared by the EU and IMF previously. However, a report Sky News talks about, how Cyprus leader Nicos Anastasiades has explicitly stated that he has no intention of letting the Euro go, considering how he could let his country go in ruins. This was probably justified of him to say taking into account the country’s economy has almost crashed and burned out.
Banks opened up after two weeks of being closed and country officials are inherently worried about the revival of their economy and their membership in the European Union. The richer citizens who had invested their money into the bank were inherently disturbed to find out that most of their money would be converted into bank shares so as to allow the bank to use a fast track bailout plan.
However, most individuals and entities consented on the grounds that loans needed to be taken from international bodies in order to save the Euro in Cyprus and revive the banks in the country. Yet, an earlier proposal which talked about taxing all customers and banks raised much hue and cry and therefore, that idea was put down as soon as it was raised.
In a statistical light, Fox News reminds us that these investors could lose up to a confirmed 37.5 percent. However, they could lose 22.5 percent further after rehabilitating the bank. While this is disdainful for most individuals, it is understandable that this change is to revive Cyprus’ economy. The European Union was disturbed by the problematic situation around Cyprus considering banks around would have a principally bad example to follow.
The bailout plan is set to take place as soon as loans are finalized with the IMF and EU. Once they are, people will lose out a large chunk on their shares immediately. However, this was expected of Cyprus considering the situation it had been in for the past two years. However, a bailout plan seems like the right thing to do at this point, even if it leads to protests, because there is a need to revive the economy. This is not just for the purpose of Cyprus getting back up on its feet, but for the fact that everyone else in the European Union has been much affected by the sudden losses the country had to face.