MEP Childers: Cyprus bailout an 'incompetent mess'

MEP Childers: Cyprus bailout an 'incompetent mess'

A Labour MEP has branded the bailout deal for Cyprus an "incompetent mess" and says that it has destabilised the Eurozone.

Nessa Childers has heavily criticised the way the deal was struck in the early hours of last Monday morning.

The MEP is warning that the longer Cypriot banks remain shut, the higher the risk of a run on them once the controls are lifted.

Cyprus is preparing limits on how much depositors can withdraw before banks reopen tomorrow morning.

The country's central bank has imposed capital controls to prevent funds going abroad. The limit for travellers leaving the country face is €3,000.

Restrictions have also been placed on credit card purchases and a ban is in place on cashing cheques.

It is not clear how long those controls will be in place.

Banks have been closed since last Saturday, but are expected to re-open tomorrow as scheduled.

Ms Childers said things were likely to get a lot worse in Cyprus.

"The economy will contract, some say by up to 10%, next year," she said. "This sends out a very dangerous message about how safe money is in banks."

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