Cyprus to impose bank limits

Cyprus’s president says the central bank will impose some limits on bank transactions tomorrow when most of the country’s financial institutions reopen for the first time in more than a week.

All banks except the Bank of Cyprus and Laiki are due to reopen tomorrow morning.

President Nicos Anastasiades did not specify what limitations would be imposed on transactions. He said it was a “very temporary measure, which will gradually be relaxed”.

The country’s banks have been closed while politicians set up a plan to secure funding for an international bailout, after politicians rejected an initial scheme that would have seized up to 10% of people’s accounts.

A deal securing the bailout was reached early today.

The last-minute solution to imminent financial meltdown came with an agreement for Cyprus to take up to almost half of the bank savings of the wealthiest people.

In return it secured a €10 billion bailout.

The deal, described by the country’s politicians as “painful”, was agreed with euro finance ministers in Brussels just in time. The European Central Bank had threatened to cut off crucial emergency assistance to Cyprus’s embattled banks if no agreement was reached.

Without that funding, Cyprus’s banks would have collapsed, dragging the country’s economy down with them and threatening its membership of the 17-strong eurozone all of which would have sent the EU’s markets spinning.

“It’s not that we won a battle, but we really have avoided a disastrous exit from the eurozone,” finance minister Michalis Sarris said.