Cyprus Crisis: Banks Shut Until Thursday

Cyprus Facing Jobless Total Of 30%

Updated: 10:40am UK, Tuesday 26 March 2013

By Tom Parmenter, Sky Correspondent, in Nicosia

Cyprus is facing a recession so deep that 30% of people may find themselves unemployed.

The EU bailout means massive restructuring of the financial system, the inevitable loss of many investors and thousands of people seeing their jobs disappear.

Professor Hari Tsoukas, a business analyst, told Sky News: "Unemployment is likely to at least double from 14% to at least 25% and possibly up to 30%. Not so long ago it was just 5%.

"It is a huge challenge now facing the Cypriot people, we have been resilient before and we will need all that again," he added.

For a week now people have been rationed to how much they can withdraw from cashpoints.

Wages have not been paid, businesses have been unable to pay suppliers and the whole economy has seized up.

Banks have been closed since March 16 but Cyprus' president Nicos Anastasiades has said they will reopen on Thursday.

However, he added that the island will introduce some limits on transactions to prevent a huge outflow of money.

Politicians have been struggling to come up with a plan that would raise enough funds to qualify for an international bailout.

In a televised address to the country, the president said: "The central bank will implement capital controls on transactions. I want to assure you that this will be a very temporary measure that will gradually be relaxed."

He did not specify what limitations would be imposed on transactions.

He said he had taken "painful decisions to save the country from bankruptcy" and pledged Cyprus "would find its feet again".

It follows a bailout deal which reports suggest could see Bank of Cyprus savers with deposits above 100,000 euros (£85,000) hit with a levy of "around 30%".

In a smart fourth floor apartment, Sky News met one Cypriot woman prepared to show us where she has been stashing her money.

Fearful of losing control of her cash by leaving it in the bank she now has a daily routine of hiding it in drawers or cupboards around her bedroom.

She didn't want to be identified but said: "You just want to know your money is safe, this is quite small scale but it is all I can do."

Her flat was burgled last year so she is taking no chances - every time before she leaves home for over an hour she collects together her growing stash of notes and takes it with her stuffed in her handbag.

She hates having to do it but while banks remain closed some people feel they have little option but to take control of their own money.

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North Korea Rocket Strike Threat Targets US

By Mark Stone, Asia Correspondent

North Korea has ordered its military to be ready to strike US bases in Guam, Hawaii and mainland America, according to state TV.

North Korea threatens a missile attack on Guam, Hawaii and the US mainland

"The Korea People's Army top command declares that all artillery troops including strategic rocket units and long-range artillery units are to be placed under class-A combat readiness," the Korean Central News Agency (KCNA) said.

The announcement came as images were released showing a new round of military exercises by the isolated state.

North Korea has previously threatened a nuclear attack on US military bases

The still photographs show what appears to be a sea-borne assault using hovercraft and an artillery drill using multiple rocket launchers - none of which would have the capacity to reach more than a dozen or so miles.

North Korean leader Kim Jong-Un is pictured visiting troops and watching the exercise from a vantage point above the unidentified beach on the country's east coast.

It's not thought to have the technology to hit the US with an atomic weapon

The photographs, released by KCNA, are accompanied by language which matches weeks of rhetoric.

According to the news agency, Mr Kim "stressed the need to destroy and wipe away any enemy who lands on their coast through strong firepower and ordered the soldiers of the heroic Korean People's Army to display their mettle in the great war against the enemies".

North Korean leader Kim Jong-Un is photographed visiting troops

"Crazy like wild wolves threatened with fire, send all of them to the bottom of the sea," he is quoted as saying.

The exercise and the photographs of it are a clear response to a series of month-long exercises taking place across the border in South Korea involving American and South Korean troops and naval forces.

Defence analysts have been studying the latest photographs with interest.

Rockets and long-range artillery have been ordered to be combat ready

James Hardy, the Asia-Pacific Editor of Jane's Defence Weekly, told Sky News he had not seen hovercraft like those in the photographs before.

However, he added: "I can categorically state that multiple rocket launchers and 'long-range artillery' are not going to threaten the US mainland, Guam or Hawaii, unless they are put on a ship and sailed to within firing distance (which I doubt the North Koreans are about to do)."

Order was issued in a statement from the North's military "supreme command"

It has been an uneasy few months on the Korean peninsula with rhetoric and threatening language at a level not seen for several years.

The increased tension comes as Seoul marks the third anniversary of the sinking of a South Korean warship.

On March 26, 2010, the Cheonan was torpedoed by the North Korean military with the loss of 46 sailors.

The fresh threat marks the latest fiery rhetoric from Pyongyang

In December, North Korea launched a satellite into orbit in the tip of a rocket.

Their claim then was that this was all part of Pyongyang's legitimate right to pursue a space programme.

Few countries bought that claim, believing instead that it represented the latest move in North Korea's development of a ballistic missile programme.

The warning follows joint military drills by the US and South Korean forces

The rocket launch was followed in February by an underground nuclear test and a sharp escalation in tension.

Faced with unprecedented UN sanctions, backed by his historical ally China, Mr Kim admitted the rocket launch and nuclear test were indeed all part of his ideological desire to destroy America and its allies.

Asked about the accuracy and range of rockets like that fired in December, Mr Hardy said he believed North Korea was still some way off possessing an operational missile of this type.

US military bases in the Pacific are in range of its medium-range missiles

"It's a mish mash of fuel types and requires quite a bit of time to assemble on a purpose-built launch pad," he continued.

"The US, or anyone else, would have plenty of time to scope it out before it got airborne so its operational value is quite low even before you start talking about the challenges of placing a warhead on it," he added.

The South says it has seen no signs of an imminent military action

The annulment of the armistice agreement with South Korea and repeated threats to attack the South over the past three weeks have, so far, been exposed as nothing more than bluff and bluster.

However, with unattributed cyber attacks in Seoul, repositioned missile defence systems on America's west coast and the presence of US B-52 bombers in the skies above the Korean peninsula, there's no doubt minds across the region and beyond are very focused on a fragile peace and an unpredictable regime.

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Cyprus Facing 30% Unemployment Amid Crisis

By Tom Parmenter, Sky Correspondent, in Nicosia

Cyprus is facing a recession so deep that 30% of people may find themselves unemployed.

The EU bailout means massive restructuring of the financial system, the inevitable loss of many investors and thousands of people seeing their jobs disappear.

Professor Hari Tsoukas, a business analyst, told Sky News: "Unemployment is likely to at least double from 14% to at least 25% and possibly up to 30%. Not so long ago it was just 5%.

"It is a huge challenge now facing the Cypriot people, we have been resilient before and we will need all that again," he added.

For a week now people have been rationed to how much they can withdraw from cashpoints.

Wages have not been paid, businesses have been unable to pay suppliers and the whole economy has seized up.

Banks have been closed since March 16 but Cyprus' president Nicos Anastasiades has said they will reopen on Thursday.

A woman and child beg for money in Nicosia

However, he added that the island will introduce some limits on transactions to prevent a huge outflow of money.

Politicians have been struggling to come up with a plan that would raise enough funds to qualify for an international bailout.

In a televised address to the country, the president said: "The central bank will implement capital controls on transactions. I want to assure you that this will be a very temporary measure that will gradually be relaxed."

He did not specify what limitations would be imposed on transactions.

He said he had taken "painful decisions to save the country from bankruptcy" and pledged Cyprus "would find its feet again".

It follows a bailout deal which reports suggest could see Bank of Cyprus savers with deposits above 100,000 euros (£85,000) hit with a levy of "around 30%".

In a smart fourth floor apartment, Sky News met one Cypriot woman prepared to show us where she has been stashing her money.

Fearful of losing control of her cash by leaving it in the bank she now has a daily routine of hiding it in drawers or cupboards around her bedroom.

She didn't want to be identified but said: "You just want to know your money is safe, this is quite small scale but it is all I can do."

Her flat was burgled last year so she is taking no chances - every time before she leaves home for over an hour she collects together her growing stash of notes and takes it with her stuffed in her handbag.

She hates having to do it but while banks remain closed some people feel they have little option but to take control of their own money.

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Newborn Left In Car With Note As Mum Shops

By Jonathan Samuels, Australia Correspondent

A baby has been found alone in a locked car with a note attached to its blanket asking passers-by to call if there were any problems.

The newborn had been left in a car seat while the child's mother went shopping at a supermarket in Porirua on New Zealand's north island.

A photo of the baby, and the hastily scrawled note which had a mobile phone number on it, has sparked outrage after it was printed in a newspaper and posted online.

According to The New Zealand Herald, a man who parked next to the car with the abandoned baby raised the alarm.

He told the paper: "It was written from the baby's perspective, and it said, 'my mum's in doing the shopping, call her if I need anything', and it had the cellphone number.

"We waited there for a little bit, wondering if the mum was just going to be two seconds and come back.

"And my wife said, 'I'm not going in without someone being here with the baby'."

The baby was spotted in the car park of Pak'nSave on Saturday morning.

According to the newspaper, another two passers-by waited by the car, with one of them phoning the mother and telling her to come outside.

Senior sergeant Justin Rakena said police could not investigate if there had been no complaint, and no-one had come forward to talk to police about it.

They had not spoken with the mother.

Police would "absolutely" investigate if a complaint was made, he told NZ Newswire.

It is illegal in New Zealand to leave a child under 14 years old alone for an unreasonable time or in unreasonable conditions.

Doing so could result in a fine of up to NZ$2,000 (£1,000).

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Russian Civilians Join Raids On Migrant Camps

By Katie Stallard, Moscow Correspondent

Russia's federal migration service has introduced civilian patrols as part of a crackdown on illegal immigrants.

Civic-minded citizens in Moscow can now sign up to take part in organised raids of migrant housing and street patrols.

The volunteers are supervised by a migration service official and not allowed to use force, unless in self-defence.

Sky News filmed a raid on a suspected migrant workers' camp in a suburb on the outskirts of Moscow.

The volunteers gathered in a supermarket car park at 6am. It was snowing heavily and the temperature was -10C, but the group seemed enthusiastic as they piled out of their 4x4s to discuss the plan.

We set off in convoy towards the camp along a rough track deep in snow. We were told the area is close to a large open-air market where many of the migrants find work.

Volunteers gather in a car park ahead of a raid

At first sight the camp was little more than a shanty town - a ramshackle collection of sheds and garages, improvised shelters against the depths of the Russian winter.

The patrol fanned out on foot, banging on doors and shouting for the people inside to come out.

Most meekly obeyed, zipping up jackets and pulling on hats as they stepped out into the snow and torchlights.

We saw one man breaking down a door with his shoulder after the occupants refused to open the door - a bewildered-looking man in his underwear was ordered to get dressed and get outside.

For the most part the volunteers were entirely civil and polite, and that was perhaps the most striking feature of what was happening - that these were not skin-headed neo-nazis or right wing extremists - to a person they seemed to be reasonable, educated Russians, who genuinely believe migrant workers have no place in their country.

Statistics suggest that view is not in the minority.

A migrant (left) is led away during a raid

According to the most recent research by the independent Levada Centre, 71% of Russians believe an increase in migration leads to an increase in crime.

Some 65% want the number of migrants in Russia - whether here legally or illegally - to be reduced, and 73% support 'strong measures' to deport those here illegally.

Members of the patrol claimed there was a clear link between migrant workers and crime.

The lead volunteer told us he believed migrants were responsible for the vast majority of local criminal activity.

"Ninety-nine percent of crime," he explained. "Most often it is, of course, guests from the east and from the Caucasus."

Another man gestured to the park behind and said: "There is so much stuff going on. They are stealing, raping, right there in the parks."

But that attitude can leave migrant workers vulnerable to exploitation - leaving them feeling they have few rights and even fewer places to turn if they find themselves in trouble in Russia.

A migrant called Bakia says she had been forced to work as a slave

Sky News met an Uzbek woman who was freed in an anti-slavery raid in Moscow last year. She told us she was forced to work as a slave for almost 10 years; cleaning, stacking shelves and serving customers in a shop.

Bakia said she was beaten and made to sleep in a basement, but that she could not escape because her children were being kept in a flat elsewhere.

She was rescued along with her six-year-old son, who she says has health problems linked to malnutrition and damage to his legs from being tied to a radiator.

Bakia says she also had a daughter, Camilla, who was taken from her shortly after the birth but she doesn't know what has happened to her.

She has no papers so it is difficult to verify her claims, but she says she has tried repeatedly to report her daughter missing to the police and a charity has now taken up her case. But four months after her release, she told us no-one is looking for her child.

Bakia said: "Thank God my son is with me, even though he is disabled. My daughter, my daughter, well if they don't want to do this I will go and look for her myself."

She told us she didn't want to leave Russia without finding her daughter, but that it was very clear they were not welcome here.

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Cyprus Bailout Deal Wins Eurozone Approval

Deposits above 100,000 euros (£85,000) in the Bank of Cyprus will be hit with a levy of "around 30%" under the EU bailout deal, a government official has confirmed.

Spokesman Christos Stylianides told state radio that the charge would be paid as the second largest Greek Cypriot lender is destined to be wound up.

But Russia, which is the source of many large uninsured accounts in Cyprus, reacted angrily on Monday to the levy news.

"The stealing of what has already been stolen continues," Russian Prime Minister Dmitry Medvedev was quoted by news agencies as telling a meeting of government officials.

Christine Lagarde and the German finance minister at the Eurogroup

The island's deal has allowed Cyprus to secure a last-minute 10bn euro (£8.5bn) EU and International Monetary Fund (IMF) approved bailout by eurozone ministers, saving the country from a banking system collapse, bankruptcy and eurozone departure.

Markets across Europe reacted positively in mid-morning trading.

The second-largest bank, Popular Bank of Cyprus - known as Laiki - will effectively be shut down and split into a "good bank" and a "bad bank".

Sub-100,000-euro deposits in Laiki will be safeguarded and transferred to the Bank of Cyprus, the so-called "good bank", while those above the 100,000-euro limit, which under EU law are not insured, will be frozen and hit with the levy of around 30% to resolve the debt crisis.

Angry Greek Cypriots have taken to the streets

The move will yield some 4.2bn euros (£3.6bn) overall - the bulk of the 5.8bn euros (£4.9bn) Cyprus needed to raise as part of the bailout conditions.

It followed fraught negotiations between Cypriot President Nicos Anastasiades and the troika of creditors - the IMF, European Commission and European Central Bank.

"We've put an end to the uncertainty that has affected Cyprus and the euro area over the past week," Jeroen Dijsselbloem, who chairs the meetings of the 17-nation eurozone's finance ministers, said.

"We believe that this will form a lasting, durable and fully financed solution," IMF chief Christine Lagarde said.

President of the European Council, Herman Van Rompuy, added: "I welcome the agreement reached by the Eurogroup and the Cypriot authorities early this morning.

Banks have been closed this past week

"The agreement is essential to ensure a sustainable future for Cyprus in the euro area. This is first and foremost true for its people, who are living through times of great uncertainty."

After the eurozone's finance ministers' approval, several national parliaments, such as Germany's, must also approve the bailout deal, which might take another few weeks. EU officials said they expect the whole programme to be approved by mid-April.

Cyprus' outsized banking sector was crippled by exposure to crisis-hit Greece and has been used as a haven for foreign funds.

In a vote on Tuesday, the country's 56-seat parliament dismissed a levy on depositors as "bank robbery".

The country's finance minister Michael Sarris then spent three fruitless days in Moscow trying to win help from Russia. The two countries share historic religious ties.

Cypriots were outraged by the original proposal and have been queuing at cash machines ever since the government ordered banks to close last weekend.

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Cyprus Agrees 20% Tax On Bank Deposits

Politicians in Cyprus have reportedly agreed a new one-off levy on savers in order to secure a European bailout.

The measures, yet to be confirmed by the country's President, include a 20% tax on savers with deposits over 100,000 euros at the country's largest bank, the Bank of Cyprus.

A 4% tax on deposits over 100,000 euros would be levied at other banks, a senior Cypriot official told Reuters.

Cyprus has to raise 5.8bn euros by Monday or face being kicked out of the single currency.

Eurozone finance ministers are due to meet on Sunday evening to see if the numbers Cyprus has agreed with its international lenders add up.

Bank workers shout during a protest outside the presidential palace

Cypriot President Nicos Anastasiades tweeted: "We are undertaking great efforts. I hope we have a solution soon."

The conservative leader, barely a month into the job and wrestling with Cyprus's worst crisis since a 1974 invasion by Turkish forces split the island in two, was due to lead a delegation to Brussels, also on Sunday, to meet heads of the "troika" - the EU, the European Central Bank and International Monetary Fund - in a sign a deal might be near.

Government officials held talks throughout Saturday at the finance ministry with troika lenders. Angry demonstrators outside chanted "resign, resign!"

Its outsized banking sector crippled by exposure to crisis-hit Greece, Cyprus needs to raise the 5.8bn euros in exchange for a 10bn euro EU lifeline to keep the country's economy afloat.

But in a vote on Tuesday, Cyprus's 56-seat parliament rejected a levy on depositors, big and small, as "bank robbery", and the country's finance minister Michael Sarris spent three fruitless days in Moscow trying to win help from Russia, whose citizens have billions of euros at stake in Cypriot banks.

Rebuffed by the Kremlin, Mr Sarris said earlier on Saturday that talks with the troika were centred on a possibly levy of up to 25% on savings over and above 100,000 euros at failing Bank of Cyprus.

However, the situation remains fluid and other options, including a "voluntary haircut" in exchange for equity that would not require parliamentary approval, are said to still be on the table.

Ordinary Cypriots were outraged by the original proposal, and have been besieging cash machines ever since bank doors were closed last weekend on the orders of the government to avert a massive flight of capital.

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Musharraf Returns To Pakistan Despite Threat

Former Pakistani President Pervez Musharraf has defied Taliban death threats to return home after more than four years in exile.

The 69-year-old ex-dictator was whisked away by security forces as he arrived at Karachi airport and did not stop to greet hundreds of supporters who had waited for him.

It is unclear if the security forces detained Mr Musharraf, who faces criminal charges in three cases including one involving the assassination of ex-premier Benazir Bhutto, or acted out of concern for his safety.

His return came after the Pakistani Taliban released a video threatening to unleash a squad of suicide bombers to assassinate him if he sets foot in the country.

Hours before his arrival, a car bomb exploded near the Afghanistan border, killing 17 soldiers and injuring dozens more.

Mr Musharraf greets supporters on his flight home to Pakistan

Mr Musharraf said he was prepared to risk any danger to stand for election on May 11, marking the first time an elected government has fulfilled its term and handed over power to another elected government.

"I don't get scared ... by such kind of threat … I am going back to save Pakistan," said Mr Musharraf, who escaped three al Qaeda assassination attempts as ruler.

Mr Musharraf is expected to make his way to the tomb of Mohammad Ali Jinnah, the father and first president of Pakistan.

He plans to hold a public rally for his All Pakistan Muslim League party, but police said they had withdrawn permission following the Taliban threat. However, the party's information secretary said the rally would go ahead "at any cost".

Mr Musharraf has been living in London and Dubai since leaving Pakistan

Mr Musharraf has failed to follow through on previous promises to return home but flew in from Dubai after a Pakistani court granted him pre-emptive bail on Friday.

The order prevents his immediate arrest in the three cases in which he is implicated.

Under the pre-emptive bail, he has 10 days to appear in court, which Mr Musharraf promised he would do.

He said he would "face these cases with bravery", adding that "elements in Pakistan and outside" were spreading rumours that he was not returning, but the granting of his bail would address some of those concerns.

The ex-president seized power in a bloodless coup as army chief of staff in 1999 and left the country after stepping down in August 2008 when Asif Ali Zardari was elected president after the murder of his wife, Benazir Bhutto.

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Berezovsky Death: Police Give Home 'All Clear'

Chemical, biological and nuclear experts from the police searching the home of dead Russian exile Boris Berezovsky have given the scene the all clear after finding "nothing of concern".

Most of the cordon which had been put in place around the perimeter of the property in Ascot, Berkshire, has been lifted and officers thanked local residents for their patience.

Scenes of crimes officers from Thames Valley Police are now carrying out a "full and thorough investigation" at the house to find out the circumstances surrounding the 67-year-old's "unexplained" death.

It has been reported the former billionaire, who had fallen out with the Kremlin, was found dead in the bath and took his own life, but this has not been confirmed.

Mr Berezovsky's lawyer Alexander Dobrovinsky told Russian state television he had been informed by contacts in London that Mr Berezovsky had killed himself.

He said: "Berezovsky has been in a terrible state as of late. He was in debt. He felt destroyed. He was forced to sell his paintings and other things."

It is thought he had done badly in the financial crisis. In 2009 his wealth was estimated at £450m, but he is thought to have spent £100m on the £3.7bn lawsuit against Chelsea owner Roman Abramovich last year, which he lost.

Speaking to Sky News, a friend of Mr Berezovsky said she did not think his death was suspicious.

Sasha Nerozina said: "There is nothing to be suspicious about, as far as I understand. It is shocking, terrible news. It is not something you expect. He was full of life and love ... we  expected him to outlive us all."

She said Mr Berezovsky had been left "demoralised" by losing the high-profile legal battle with Mr Abramovich in 2012.

Mr Berezovsky was a friend of murdered dissident Alexander Litvinenko, who died in London after consuming radioactive polonium in 2006.

Mr Berezovsky made his fortune in Russia in the 1990s when he bought up state assets which were being sold off cheaply.

He had lived in Britain from 2000, having fled from Russia after falling out with President Vladimir Putin.

In fear of his life, he sought political asylum and moved to the South East of England, buying upmarket properties in Knightsbridge, London, and Berkshire.

The businessman survived a number of assassination attempts, including a bomb in his car that decapitated his chauffeur.

He became a vocal and strong critic of Mr Putin's rule in Russia, where had become a wanted man.

More follows...

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Cyprus Leaders Head To Brussels For Talks

Cyprus Bailout: Threat To Savings

Updated: 7:36am UK, Saturday 23 March 2013

By Ashish Joshi, Sky News Correspondent

Finally late into Friday night - an agreement on Plan B, meaning Cyprus has moved one giant step towards securing a Brussels bailout.

It includes a solidarity fund pooling together state assets and the granting of power to the Government to control bank capital.

The latter move is to prevent a run on the banks when their doors finally open on Tuesday.

There will also be a restructuring of the country's banks and a savings tax on Cypriot savers.

The details of the tax have still to be finalised, but the framework is in place.

It could mean savings over 100,000 euros held in Bank of Cyprus accounts being taxed up to 20%, according to one source close to the negotiations.

The same source said if that proposal is rejected there will be a plan to impose a tax of around 10% on all Cypriot bank accounts over 100,000 euros.

The threat of savers being hit hangs over the heads of people like Loizos Michael.

The 60-year-old tailor worked hard for 35 years, building up a good business.

He was looking forward to a wealthy retirement. Not anymore. Times are hard.

Speaking from his small tailor's shop in central Nicosia, Mr Michael said: "With the banks being closed, it is hard because I don't have a credit card and so cash flow is a problem.

"Even filling your car with petrol needs thinking about.

"Cypriots have always been workers by nature and nobody could have imagined that unemployment would be so high.

"This has hit us hard in the pockets."

Cyprus is weathering a storm - the likes of which this Mediterranean island has never faced in her young history.

Mr Michael said he knew things were getting bad, but expected solutions to be found to avoid ordinary people having to suffer.

"I expected something better. But now, it looks like the problem has been brewing for some time," he said.

"There used to be some people talking about the crisis, but now everyone's talking about it.

"I think things are harder now than just after the war. After the war of '74 people could still find work. Now, there is just no work so people have no money. What can we do?"

In the 1990s, Cyprus boasted a dynamic, booming economy, but it grew and unchecked.

An overbloated banking sector exposed to Greek debt has crippled the country's economy.

Now people like Loizos Michael must pay the price. He and the rest of Cyprus will soon find out exactly how much that is going to be.

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