DREAD was mixed with anger. Cypriots feared that deposits in the two largest banks, Bank of Cyprus and Laiki Bank, might be taxed or converted into worthless equity—and worried about the economic effects. The glum mood in the shops and cafés of Nicosia was little improved when the terms of their country’s €10 billion ($13 billion) bail-out emerged on March 25th (see
article). The deal will close Laiki Bank, restructure Bank of Cyprus and impose big losses in both institutions on deposits above €100,000.Many anxious Cypriots queued patiently to draw cash out of ATMs. Others protested angrily in the streets, waved Russian flags and talked about leaving the euro. They had hoped that joining the European Union (in 2004) and the euro (in 2008) meant solidarity from their fellows. The troubles of the two banks were caused, some believe, by a decision to buy Greek government bonds that were then restructured. They feel they are being punished by the EU for no fault of their own.Victimhood is hardly new in Cyprus:...
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