Cyprus banks’ closure extended until Thursday

Associated Press

NICOSIA, Cyprus

Cyprus has extended the closure of its banks for two more days — until Thursday — a sudden postponement that comes after the country’s leaders spent days struggling to come up with a plan to raise the money needed to secure an international bailout.

Banks in the country already have been closed for more than a week to prevent a run on deposits. All except the country’s two largest lenders had been due to open this morning after the country clinched an eleventh-hour deal with the 17-nation eurozone and the International Monetary Fund to provide Cyprus with a bailout.

Without that deal, the country’s banks would have collapsed, dragging down the economy and potentially pushing it out of the eurozone.

The decision to keep banks closed two more days was announced late Monday.

Banks have been closed since March 16 to avert a run on deposits as the country’s politicians struggled to come up with a way to raise enough funds to qualify for the bailout. An initial deal that would have seized up to 10 percent of people’s bank accounts spooked depositors and was soundly rejected by lawmakers early last week.

ATMs have been functioning, but many have run quickly out of cash, and a daily withdrawal limit of 100 euros was imposed on the two largest lenders, Bank of Cyprus and Laiki.