ECB To Set "Fair" Cypriot Standard Of Living Via Capital Controls
As Europe wakes up to what could be a tumultuous day, Handelsblatt reports that the ECB has decided that, due to the "great danger" of a bank run once they reopen next week, it will enforce capital controls independently of Cypriot (elected) officials. With perhaps a nod towards negotiating some ELA funding for Cypriot banks next week (if the government accepts this ECB-enforced 'program'), the rather stunning restrictions on people's private property include:
- Freezing Savings - no time-frame (it's not your money anymore)
- Make bank transfers dependent on Central Bank approval (a money tzar?)
- Lower ATM withdrawal limits (spend it how we say?)
The capital controls will be designed "so that citizens have access to sufficient cash to go about their lives." So, there it is, a European Union imposed decision on just how much money each Cypriot can spend per day. Wasn't it just last week, we were told Europe is fixed?
Handelsblatt cites unidentified central bank sources so we wonder whether this is yet another strawman shot across the bow as the Cypriot government heads in for an early start of discussions at 10am (GMT)
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