NICOSIA – It took more than two years and wiped out a lot of people but Cyprus has ended its stringent capital controls.
President Nicos Anastasiades in 2013 ordered confiscation of 47.5 percent of accounts of more than 100,000 euros in banks, imposed austerity and set limits on how much people could take out, reneging on campaign promises to satisfy the country’s international lenders.
In return, Cyprus got 10 billion euros from the troika of the European Union-International Monetary Fund-European Central, although the Laiki Bank closed, completely emptying the bank accounts of depositors who lost everything.
As the controls ended, there was no turmoil or unusual activity.
“It was just an ordinary day. Absolutely nothing out of the ordinary was noted,” a source at lender Hellenic Bank told Reuters while the Bank of Cyprus also said activity was normal.
The last controls to go were regulatory approval to move more than 1 million euros ($1.1 million) out of the country, and a traveler’s limit of 10,000 euros per trip.
“The controls that were in place until this week were sufficiently loose to have been essentially non-binding,” Sofronis Clerides, Associate Professor of Economics at the University of Cyprus told the news agency.
“The Cypriot government has – quite rightly – made a point of distancing itself from Greece,» said Clerides, who said financial ties had been reduced significantly.
“The complete abolition of capital controls is another step in that direction. The Cypriot government is taking a calculated gamble that the removal of capital controls reduces the possibility of contagion from Greece should things deteriorate there,» he said.