The banks reopened in limited capacity in Cyprus today, with significant capital controls put forth by the Cyprus Ministry of Finance in order to avoid a run on the banks. These controls are supposed to be in place for the next seven days, and, according to Reuters, the Cypriot depositors will be unable to:
• Cash a check
• Withdraw more than €300 a day
• Take more than €3000 in cash per person in any currency out of the country
• Purchase more than €5000 in foreign goods and services with a credit card each month
• Make non-cash payments outside Cyprus without documentation showing they are paying for imports
On radio this morning, Glenn, Pat, and Stu broke down the ridiculousness of the situation – in particular, the media’s ‘nothing to see here’ coverage of the banks re-opening.
“They are allowing you up to 300 [euros]. It’s great. Everything’s fine in Cyprus,” Pat quipped. “Oh, man, you haven’t been to the bank in almost two weeks and if they allow you 300 bucks, now you’re set. That’s fine.”
No need to worry! The media has provided some truly groundbreaking reporting today, letting us know that everything is fine on the streets of Cyprus.
“Have you seen the spin on this,” Pat asked.
“Oh, yeah, I have,” Glenn responded. “I think it’s up on TheBlaze, I read it this morning, all of the tweets coming out this morning saying, ‘Guys, there’s no problem’; all the journalists over there, ‘There’s no problem.’”
TheBlaze compiled some of the commentary coming out of Cyprus in story posted earlier today. The Associated Press reported:
“Across Cyprus, large but orderly lines formed ahead of the opening of banks for six hours from noon, and guards from private security firms reinforced police outside some ATMs and banks in the capital, Nicosia… People filed calmly into banks across the country once they had opened, and no crowd issues were reported.”
4 News took a similar tone, with economic editor Faisal Islam reporting:
“For Cypriots, who have been struggling to cope with the bank closures that have seen cash rationed at ATMs, the reopening of bank branches was an orderly, welcome development, despite the stringent new controls on the use of cheques and the export of cash… So far, it would be wrong to call this a bank run, even though it looks like one. It’s transactional demand for cash after two week closure… Calm, dignified, and not a bank run. But impossible for it to be so, because of capital controls. Cypriots making best of bad situation.”
The Wall Street Journal took a slightly different approach, but the message from multimedia producer Dipti Kapadia was still:
“Surprisingly, little panic as Cyprus banks reopen.”
While all may appear fine and dandy on the ground, Glenn explained the ramifications of the Cyprus bailout will be anything but. The larger implications of this situation allow for complete governmental control.
“Well, first of all, they are only allowing you 300 [euros],” Glenn said. “Why go to the bank? Just go to the ATM. Why even go to the bank… This is not a good situation. But, train them. Train the people: You’ll take out as much as we tell you can take out. And you’ll do it in an orderly fashion.”
“And you’ll remove none of it from the country,” Pat added, referencing another one of the capital controls.
“That’s right. That’s right,” Glenn concluded. “Welcome to it, gang.”