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Cyprus rules out leaving Euro zone

Nicosia, March 30, 2013

The president of Cyprus yesterday said the risk of bankruptcy had been contained and the country had no intention of leaving the euro, in a speech laden with criticism of Europe's currency union for "experimenting" with the island's fate.

Conservative leader Nicos Anastasiades spoke a day after banks reopened following an almost two-week shutdown imposed as the country raced to clinch a rescue package from the European Union.

Officials slapped firm limits on transactions to avert a run on deposits by worried Cypriots and wealthy foreign investors. The reopening of the banks was largely quiet on Thursday, with Cypriots queuing calmly for the 300 euros they were permitted to withdraw.

Anastasiades said the restrictions on transactions - unprecedented in the currency bloc since euro coins and banknotes entered circulation in 2002 - would be gradually lifted.

Cyprus' difficulties have sent jitters around the fragile single European currency zone, and the imposition of capital controls has led economists to warn that a second-class "Cyprus euro" could emerge, with funds trapped on the island less valuable than euros that can be freely spent abroad.

Anastasiades hit out at banking authorities in Cyprus and Europe for pouring money into a crippled Cypriot bank that now faces closure under the 10 billion euro ($13 billion) bailout plan that averted the immediate risk of financial meltdown.-Reuters




Tags: Cyprus | Euro zone | Bailout |

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