27 Mar 2013

Nicosia’s corralito: the kids leading Cyprus’s controlled anger

At about 11:30 am yesterday we were driving through Nicosia, thinking it might be time to fly home. But as we drove down a side-street streaming across the next junction were thousands of kids, bunking school to protest against the Troika EU bailout deal.

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It reminded me of the scene from the Argentine film Nine Queens about the corralito. “Exo i Troika tora” or   “Troika Go home now” they chanted to the tune of the White Stripes’ Seven Nation Army.

Banners declared “Your mistakes. Our future”. Schoolkids and students really do think that the European Union and IMF are stealing their future.

At 11am Nicosia’s schools emptied as they rushed out on the streets, in their thousands, marching on the presidential palace to vent their anger at Cyprus’s incredible financial collapse.

“Fight on, with all your voice until you can’t shout anymore… for your country, for your parents,” shouted one young girl.

In Argentina it was housewives bashing pots and pans against their savings being trapped banks. In Cyprus right  now it seems to be  children organising through Facebook and Twitter, but with none of the violence that you witness in Athens.

Relaxed police chatted with the kids. But they weren’t taking any chances, behind the presidential fencing, riot police were ready, emotions are high.

Taking their cue: protesting bank workers. They received texts to mass at the HQ of the stricken Bank of Cyprus, after its boss resigned in the morning.

Stella, a bank worker and mother, welled-up with tears explaining to me that all she wanted to do was work to help her family and her bank pay back its debts.  The clerks and office workers marched on the Central Bank next door. They are not great fans of the Central Bank Governor Panicos Demetriades.

Yesterday a deal to transfer its deposits along with the other deposits in Greek subsidiaries of Cypriot banks to Greek bank Piraeus, was signed off. Many eyebrows in Nicosia are being raised at the rather low price. I have much more to report on this tonight.

In three hours we are told that finance minister Michael Sarris will finalise capital controls for this island, including numbers on limits for withdrawals, the renewal of term deposits, and currency export controls.

I’ve done extensive work tracking such moves in Iceland. Four and a half years on they are still finding it impossible to lift controls on foreign-owned krona, so-called “quick krona”.

Icelanders are limited to £1,800 of foreign exchange, which they must return if their trip is cancelled. Sarris promises these Cypriot limits will last just weeks. He has to, otherwise it would be basically incompatible with EU membership, let alone eurozone membership.

It’s already the longest bank shutdown (for financial stability reasons) in recorded economic history. Longer than Argentina, Uruguay, Ecuador, Credit Anstalt.

With anger stirring from bank clerks to kids, no one’s certain branches will reopen on Thursday.  When they do reopen it will be with the help of unarmed private guards from G4S.

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3 reader comments

  1. Nigel Wilson says:

    It is sad to shout at the telly but I did this last night when I saw this report. the children felt their lives had been un-made. At one level it saddened me as this should not be what teenagers should be having to think about, but at another level I shouted `well, go and make another future’. There are alternatives but I seems strange that people feel unable to construct them. The Icelanders are having a go at it: small island nations may have it made in that regard.

  2. Guillermo contreras says:

    For one thing Cyprus should exit the European Monetary Union right now, other wise things are going to become worst that we can imagine.

    Once Cyprus exits the EMU, should declare a moratorium on their sovereign debt for at least three months, in order to put its house in order and exit in an orderely fashion,.
    This way Cyprus will buy precious time and return to its former monetary unit, start printing or issueing Debit Cards to its entire population so people with savings and deposit in their banks, wont’ have to suffer any “corralito” or limit their dayly banking operations,
    At the same time, since the depositors are in Euros now, The cyprus government should guarantee and protect every deposits and savings that the new currency issue or debit, will have the same exchangeable value with the Euro, Nothing has changed so far this way , business as usual.
    And for now on the new Cyprus money should mantain equal value with the present exchange value with the Euro, No devaluation whatsoever.

    The next step, will be to protect foreign deposits in cyprus banks, no matter how much are in deposits or investments, by declaring that the banks in Cyprus are offshore banks,…

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