(NICOSIA, Cyprus) — Cyprus is getting ready to reopen banks on Thursday, with considerable uncertainty about what will happen economically.
Officials are working on capital control measures to prevent a bank run with depositors cashing out their accounts.
European and Cypriot government leaders reached a deal earlier this week that averted a bank collapse on Cyprus.
The estimated $13 billion bailout calls for shrinking the banking system. In fact, the Cyprus Popular Bank will be shut down and viable assets will be taken over by the Bank of Cyprus.
To help pay for the bailout, bank depositors with more than 100,000 euros will endure losses, while those under that amount will be protected.
This is the first time that Europe will actually reach into people’s bank accounts in order to pay for a bailout.
Protests have been staged in Nicosia against the strict terms of the deal, and there’s worry that many Cypriots could besiege banks as soon as they reopen after the recent shutdown.
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Sam Turner, Deseret News
Jose Pagliery, CNN Newswire