So Cyprus is introducing capital controls. Predictable, in the wake of depositor losses and threatened losses.
However, in the age of the internet, of much more limited effect than it used to be. Time was, when ordinary people had no option for their banking needs than the banks in their local high street, or at best, in the centre of their city. A bank run meant that people flocked to their bank, took money out, hid it under the mattress and then, when things had settled down, promptly put it back in the same bank. Assuming, of course, that it still functioned.
Now people can transfer money over the internet. At best, they may transfer money to branches of foreign banks operating in Cyprus: that will kill the Cypriot banks without necessarily being catastrophic for their banking system and their balance of payments. At worst, they will send money abroad, as soon as they are allowed to, and in whatever small amounts they are allowed to, using automated payments to make sure they never miss an opportunity.
The article quotes a studend, one Thomas, as saying "They've just got rid of all our dreams." I think you're going to have to pay for your own dreams from now on, Thomas.
Incidentally, the article says that although they are now in for a decade of stagnation and falling living standards, at least the Cypriots have avoided the "catastrophe" of an exit from the Eurozone. Catastrophe? For whom? The one thing that the Cypriots don't need right now is to be inside the Eurozone. It will carry on making their goods uncompetitive and encouraging them to spend money they haven't got. You really couldn't make this up. The real exercise in masochism today is not some alleged "austerity" but a pointless, almost religious, dedication to the nonsense of Eurozone membership!
Also, I wouldn't like to be a German gas consumer next winter. Supplies from Russia are going to be, shall we say, unreliable.
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