The Euro has nosedived against all of its major peers as a controversial bailout package for Cyprus caused renewed turmoil across the Eurozone.
On Sunday Eurozone finance ministers demanded that Cypriots pay up to 10% of their bank deposits in exchange for a €10 billion bailout, a demand that has sparked outrage across the region and one that has created panic across the island as people desperately rushed to cash machines to withdraw their hard earned savings.
The decision has been condemned by expats and economists alike as it raises the possibility of triggering bank runs across the Eurozone and raised the possibility that similar measures could be imposed on other struggling nations.
Stelios Zinga, a truck driver in his late 50s, had joined the cash point queues. “People are panicking, they’re afraid of losing their money, they don’t feel they can trust banks anymore,” he said. “The problem with this levy is that it is the cautious, working-class people who are being made to pay.”
The Cypriot president Nicos Anastasiades last night addressed the nation warning of dire consequences if the bailout was not agreed. He claimed the
following would happen without the deal.
“1. One bank would instantly cease operation. Following that the other major bank would suspend operations and we would finally be led to the collapse of the banking sector.
2. As a result, depositors would lose direct access to their deposits, while a large number of depositors would be subject to significant losses.
3. Thousands of SMEs and other businesses would risk bankruptcy.
4. Equally important, however, would be the direct loss of thousands of jobs in the banking sector. I cannot also ignore the consequent loss of thousands of other jobs related to banking activities.
5. The culmination of disorderly bankruptcy would be our potential coercion to exit the Eurozone. A similar development would doubtless lead to a significant devaluation of our currency and our national wealth, with all that that would entail.”
If the bill is voted through Monday afternoon, all Cypriot residents whether rich or poor will have some of their cash seized by the government, an act that is surely tantamount to theft.
Current Euro exchange rates
As of 10:15 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8566
The Euro to US Dollar exchange rate is currently trading in the region of 1.2966
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2496
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5727