Cyprus capital controls must be lifted, says commerce minister

Capital controls in Cyprus are doing more damage than a one-time levy on savings and need to be lifted as soon as possible, Commerce, Tourism and Industry Minister George Lakkotrypis said.

“We are now at a point where capital controls are hurting more than the haircut itself,” Lakkotrypis said in a June 17 interview in Nicosia. “Small and medium-sized enterprises are closing one after the other and the longer we have controls, the longer we’ll have uncertainty.”

Cyprus agreed on March 25 to a 10 billion-euro loan from the euro area and the International Monetary Fund in return for measures including a levy on savings of more than 100,000 euros at Bank of Cyprus Plc and the resolution of second-biggest lender Cyprus Popular Bank Pcl. Those concessions were demanded by creditors in a bid to shrink the country’s banking industry and led to Cyprus imposing the first capital controls in the euro area.