‘You have to do this, otherwise we bring you down’

Speaking exclusively to Channel 4 News in Nicosia, Chris Pavlou said Cypriot President Nicos Anastasiades was told that if he wanted the 10bn euro bailout from the EU and IMF, he had no option but to agree to these terms.

The former Laiki vice chairman said the president had not had any negotiating power, adding: “It’s not very nice, actually, to see two or three people half your age – clever people – coming over there and shaking their hands at the president and saying, ‘You have to do this, otherwise we bring you down’. It is very painful for someone who’s just been elected to actually face that.”

Banks in Cyprus are re-opening on Thursday after being closed for the last two weeks to stop large-scale withdrawals.

Draconian restrictions

Draconic restrictions are being introduced on withdrawing, exchanging and exporting currency.

There are reported to be limits on how much cash people can withdraw from their accounts; a ban on cashing cheques; a 3,000 euro limit on money that can be taken abroad; and restrictions on money transfers from the country’s two largest lenders – Bank of Cyprus, whose chief executive Yiannis Kypris resigned today, and Laiki.

Both banks are being restructured and big depositors face losses of as much as 40 per cent as part of the deal agreed with the EU and IMF.

Extra security guards have been employed to prevent disorder when the banks re-open.

Authorities are looking to increase the daily cash withdrawal limit from 100 to 300 euros, while payroll payments will be allowed to help businesses, which have taken a huge hit as people cut down on their spending. The restrictions will be in place for at least a week.

It’s not very nice, actually, to see two or three people half your age – clever people – coming over there and shaking their hands at the president and saying, ‘You have to do this, otherwise we bring you down’. Chris Pavlou

Security at the banks has been passed to British company G4S. John Argyrou, managing director of the firm’s Cypriot arm, said: “Our presence there will be for the comfort of both bank staff and clients, but police will also be present,”

‘Civil and patient’

Mr Argyrou said he did not foresee any trouble, adding: “There may be some isolated incidents, but it’s in our culture to be civil and patient, so I don’t expect anything serious.”

Banks were closed on 15 March as politicians considered plans to raise 5.8bn euros to qualify for the bailout.

Read more: The anguish of Cyprus in the words of its people

Under the deal clinched in Brussels on Monday, Cyprus agreed to slash its oversized banking sector and inflict hefty losses on large Laiki and Bank of Cyprus depositors.

Laiki is to be restructured, with its healthy assets going into a “good bank” and its non-performing loans and toxic assets going into a “bad bank”. The healthy side will be absorbed into the Bank of Cyprus.

Cyprus bailout – the key questions