(A) No cashing checks. Provided that may deposit checks into account.Essentially Cyprus banks will be like a roach motel. Your money can come in but will have severe restrictions for getting out. So even if you don't have to deal with a haircut, what is your incentive to deposit any money into an already existing bank account in Cyprus? Wouldn't you just let your money dwindle by paying expenses out of your bank account but not depositing any more money, just to be safe? Also, the average Cypriot makes about 1,765 Euros per month, I'm sure some scheme will pop up where they will be able to transfer their money off the island using credit, debit or prepaid cards (which have a 3,000 Euro per month limit) and also first degree relatives (10,000 Euros per quarter limit). And then there is the issue of where the money is going to come from to actually even let Cypriots get paid. If most businesses just lost between 40-90% of their cash and the economy is in shambles, won't most just go belly up and lay off everyone? Or move to a barter system? My guess is that these capital controls won't work and will only incentivize people to stop depositing in their bank accounts leading to the necessity of another bailout, or more preferably, a Cypriot exit from the Euro. Given the pound of flesh the Germans wanted seems to include vital organs, I'm not sure Cyprus can afford another bailout and will need to get free from the Eurocrats once and for all.
(B) No non-cash payment or money transfer outside the Republic, except:
(i) payments for commercial transactions within the ordinary activities of the client by presenting documentary evidence. Not require the production of documents for amounts not exceeding € 500.
(ii) payment of salaries of employees working outside the Republic
(iii) subsistence expenses up to € 10.000 per quarter tuition and persons studying abroad and first-degree relatives of persons who have their habitual residence in the Republic, with the presentation of relevant evidence. Provided that all payments made to the beneficiary.
(iv) Payments or transfers outside the Republic by debit or credit card or prepaid, to € 5.000 per month per person for each institution.
(v) Payments of claims by insurance companies
(vi) or other payments and money transfers is ensured provided that prior approval of the Commission
(C) Any termination filing deadline before the specified end date unless the product will be used to repay the loan within the same institution.
(D) The transport of euro banknotes or foreign currency in excess of the amount of € 3000 or the equivalent in foreign currency per person per trip abroad.
The Director of Customs shall implement this measure.
(E) Financial transaction, payment or transfer, which is not completed before the commencement of this Ordinance, subject to the provisions of this Order restrictive measures.
(F) prohibit a credit institution to perform cashless payments or money transfers that aim to circumvent the restrictive measures.
(G) The restrictive measures apply to all accounts, payments and transfers, regardless of the currency.
Excluding restrictive measures:
(A) All money transferred from abroad to the Republic.
(B) Diplomatic Missions
(C) financial transactions on their own behalf institution
(D) Payments authorized by the Commission ∙
(E) The Republic ∙
(G) The Central Bank. This Order is valid for a period of seven days commencing from the date of publication in the Official Gazette.
Wednesday, March 27, 2013
How is Cyprus Not Going to Need Another Bailout?
Capital controls for Cyprus were just announced. Here is a list (as translated by Google):