Nicosia was eerily quiet on Wednesday, the morning after demonstrators cheered parliament’s rejection of what was seen as an unfair EU diktat.
The government has not allowed banks to reopen this week to prevent a run, but cash machines which were emptied over the weekend have been replenished, giving people access to limited amounts of cash.
“Things won’t be so bad as long as people can withdraw from ATMs but if they go too there will be a huge problem,” said Titos Pitsillides, 50.
President Nicos Anastasiades, barely a month in the job, met party leaders and the governor of the central bank at his office. Government spokesman Christos Stylianides said a “Plan B” was in the works.
“A team of technocrats has gone to the central bank to discuss a plan B related to financing and reducing the 5.8 billion euro amount,” he told reporters during a break in the meeting with party leaders. He did not elaborate.
Lawmaker Marios Mavrides told Reuters one option under discussion was to nationalize pensions funds of semi-government corporations, which hold between 2 and 3 billion euros.
Anastasiades was also due to hold a cabinet meeting and talk with officials from the so-called “troika” of the EU, European Central Bank and International Monetary Fund.
Among the most urgent decisions awaited was whether the government will allow banks to reopen as planned on Thursday, or keep them closed until next week. Deputy Central Bank governor Spyros Stavrinakis said no decision had been taken yet.
The crisis is unprecedented in the history of the divided east Mediterranean island of 1.1 million people, which suffered a war with Turkey and ethnic split in 1974 in which a quarter of its population was displaced. The Turkish-populated north considers itself a separate country, recognised only by Turkey.
While Brussels has emphasised that the tax measure was a one-off for a country that accounts for just 0.2 percent of Europe’s output, fears have grown that savers in other, larger European countries might be spurred to withdraw funds.
GAS DEPOSITS
Leaders of the currency union said the bailout offer still stood, provided the conditions were met. Teetering Cypriot banks have been crippled by their exposure to the financial crisis in neighbouring Greece, where the euro zone debt crisis began.
Germany, facing an election this year and increasingly frustrated with the mounting cost of bailing out its southern partners, said Cyprus had no one to blame but itself.
With Sarris and Energy Minister George Lakkotrypis in Moscow, there was mounting speculation that Russian oil and gas giant Gazprom had mooted its own assistance plan in exchange for exploration rights to Cyprus’s offshore gas deposits.
Noble Energy reported a natural gas recovery of 5 to 8 trillion cubic feet of gas south of Cyprus in late 2011, in the island’s first foray to tap offshore resources.
A senior source in the “troika” said dealing with Cyprus was even more frustrating than protracted wrangling with Greece.
“The Greeks wanted to cheat on you all the time, but they knew what they wanted. The Cypriots are leaving us really confused,” the source said.
Reuters
