Cyprus rescue is painful

The authorities made no distinction between term deposits and current accounts. That translated into a drying up of liquidity throughout the country. Then, “they decided to make an exception for not-for-profit associations, and to confiscate only 30 per cent of amounts over €100,000, instead of 100 per cent. We were repaid in May, which let us pay the salaries.”

The two banks also held a large part of workers’ welfare funds. In Cyprus, where unemployment benefit is paid out for only six months, many employers encourage their staff to pay into this common fund. When the employee leaves the company, he receives what he paid in: it is a form of compensation. “We don’t yet know what will happen to this Fund,” says a worried Nicolas Philippou.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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