Bailed-Out Cyprus Banks Feel Good Now, Depositors Don’t

Failed Laiki Bank Cyprus

NICOSIA – Saved by seizing depositors accounts, Cypriot banks said they’re recovering but want more government reforms and investments.

President Nicos Anastasiades, breaking campaign promises, agreed to let the banks confiscate 47.5 percent of bank accounts over 100,000 euros in 2013 to get a 10-billion euro bailout from international lenders.

That saved the banks, who had brought the country to the edge of ruin with big holdings in Greek bonds that were devalued 74 percent and with their bad loans to Greek businesses who didn’t pay and left Cypriot depositors to pick up the tab.

Anastasiades promised to go after the bankers who did it but reneged on that promise too and instead has crowed he brought a recovery that came on the back of many Cypriots losing much of their life’s savings.

Banking association Director General`s Michalis Kammas message in the annual report was that the recovery “is significant as it creates the circumstances which will attract foreign investments and will enhance new sectors of business activity, building on both our competitive advantages and on emerging opportunities.”

“Taking all these developments into account, we are cautiously optimistic as far as the future of the banking sector and the economy in 2016 are concerned. We hope that the government and the new Parliament will have a fruitful cooperation for the continuation of the necessary reforms and legislative changes in economy,” he stated, according to in-Cyprus.

The Parliament has approved the legislation which relates to insolvency, foreclosures and the sale of loans, including getting the power to foreclose on the homes of people who couldn’t afford to pay after austerity measures were imposed by the government.

“We generally believe that these laws are effective tools, enabling banks to deal with difficult and sensitive matters, such as non-performing loans and loan restructurings”, said Kammas.

The deal Anastasiades struck also led to the closing of the Laiki Bank and the loss of deposits of customers while bank officials were not held to account.