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What They're Saying About Cyprus

Reaction to Cyprus Economic Crisis


What They're Saying About Cyprus

Students protest against austerity measures in front of the Cypriot Presidential House on March 26, 2013, in Nicosia, Cyprus.

(Photo by Milos Bicanski/Getty Images)
Starting with exposure to the Greek debt crisis, Cyprus faced a downgrading to junk status and a troubled financial sector. A 10 billion Euro bailout was offered to Cyprus including austerity measures and a directive to close the country's second largest bank while putting levies on uninsured deposits at other banks as well. Protests erupted in Nicosia and outside banks as limits were placed on how much customers could withdraw and take out of the country.

"The Commission takes note of temporary restrictions on the free movement of capital, including capital controls, imposed by the Republic of Cyprus as part of a series of measures to prevent the significant risk of uncontrollable outflow of deposits which would lead to the collapse of the credit institutions and to the immediate risk of complete destabilisation of the financial system of Cyprus... Such exception to the principle of the free movement of capital must be interpreted very strictly and be non-discriminatory, suitable, proportionate and applied for the shortest possible period. In current circumstances, the stability of financial markets and the banking system in Cyprus constitutes a matter of overriding public interest and public policy justifying the imposition of temporary restrictions on capital movements." -- statement of the European Commission, March 28, 2013

“The agreement reached today on Cyprus provides a comprehensive and credible plan to deal with the current economic challenges in the country. The plan focuses on dealing with the two problem banks and fully protecting insured deposits in all banks. It addresses upfront the core problem of the banking system through a clear strategy that ensures debt sustainability and does not excessively burden the Cypriot taxpayer. This agreement provides the basis for restoring trust in the banking system, which is key to supporting growth. We believe the plan provides a durable and fully financed solution to the underlying problems facing Cyprus and places it on a sustainable path to recovery." -- Christine Lagarde, managing director of the International Monetary Fund (IMF), March 24, 2013

"As we have stood with our partners in Europe as they’ve dealt with some of the financial instability that they’ve been experiencing over there, it has been -- the senior officials at the Treasury Department have been the principal point of contact for their colleagues. The President has talked about the impact that this instability on the financial system in Europe has had on the American economy, so it’s something that we’re engaged in trying to help the Europeans to solve." -- White House spokesman Josh Earnest, March 25, 2013

“All possible mistakes that could be made have been made by them,” he added. “The measure that was proposed is of a confiscation nature, and unprecedented in its character. I can’t compare it with anything but ... decisions made by Soviet authorities ... when they didn’t think much about the savings of their population. But we are living in the 21st century, under market economic conditions. Everybody has been insisting that ownership rights should be respected.” -- Russian President Dmitry Medvedev

"The developments confirm that today, in conditions of a very deep crisis, centrifugal tendencies in the EU and the Eurozone are strengthening as well as the competition amongst countries and sections of capital over who will benefit more from the crisis, who will have fewer losses. The competition over the control of the natural resources and the energy transport routes is strengthening especially in the region of the eastern Mediterranean, entailing unforeseeable dangers for the people. The Greek people, the Cypriot people and the other peoples of Europe can and must make their mark on the developments. They should reject the blackmail of capital, the EU the IMF. They should not line up behind any imperialist power. They should follow the road for the disengagement from the EU and the imperialist alliances." -- Communist Party of Greece

The banks must take responsibility for themselves. That’s what we have always said. We don’t want taxpayers having to save banks but that banks save themselves.” -- German Chancellor Angela Merkel

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