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President of Cpyrus says country was a euro 'experiment'

 

Reuters
Friday 29 March 2013 11:32 GMT
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Nicos Anastasiades has authorised the accountant-general to cut his salary to show solidarity with Cyprus' savers
Nicos Anastasiades has authorised the accountant-general to cut his salary to show solidarity with Cyprus' savers (Reuters)

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In a speech laden with criticism of Europe’s currency union for “experimenting” with the island’s fate, the president of Cyprus has said the risk of bankruptcy has been contained and it has no intention of leaving the euro.

Nicos Anastasiades was speaking a day after banks reopened following an almost two-week shutdown to avert a run on deposits by worried Cypriots and wealthy foreign depositors as the country raced to secure a rescue package from the European Union.

Mr Anastasiades said restrictions imposed on bank transactions in Cyprus – unprecedented in the currency bloc since euro coins and banknotes entered circulation in 2002 – would be gradually lifted. But he gave no time frame.

Barely a month in the job and wrestling with Cyprus’s worst crisis since the 1974 war that split the island in two, he accused the 17-nation euro currency bloc of making “unprecedented demands that forced Cyprus to become an experiment”.

But he added: “We have no intention of leaving the euro. In no way will we experiment with the future of our country.”

Cyprus’s difficulties have sent jitters around the already fragile eurozone, and the imposition of capital controls has led economists to warn that a second-class “Cyprus euro” could emerge, with funds trapped on the island worth less than euros that can be freely spent abroad.

European leaders have insisted the tax raid on big bank deposits in Cyprus is a one-off that is needed to tackle a debt crisis that refuses to be contained.

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