FX.co ★ Cyprus president reduced his salary by 25%

The president of Cyprus Nikos Anastasiades has cut his own salary by 25% in show of compassion for people suffering from financial meltdown, Agence France-Presse says citing undersecretary to the president Constantinos Petrides.
Moreover, cabinet members will take a 20% reduction. In addition, the president and the members of the government are to renounce the 13th month salary to which they are entitled.
In 2010 both the Cyprus president and the ministers have already slashed their wages by 10%. At that time Dimitris Kristofias was at post and his earnings were 145,000 euro a year.
Cypriot economy fell into recession due to losses incurred by the financial organizations which were hurt by severe economic turmoil in Greece. Cyprus banks had large holdings in Greek bond, that is why when the securities fell in price, it led to big losses. Cyprus agreed to get a 10 billion euro bailout from the EU, IMF, and the ECB. However, the island had to implement bank restructuring in return.
Initially Cyprus government was aimed to approve one-time tax on deposits opened with local banks, but the parliament did not pass the bill. Moreover, this measure was criticized abroad. As the result, Cyprus largest banks Bank of Cyprus and Cyprus Popular Bank (Laiki Bank) were said to be partially merged. After that, deposits over 1000,000 euro in both banks will take a loss around 40-80%.
The government closed the banks for almost two weeks facing the risk of uncontrolled capital fly. The credit organizations were re-opened on March 28, however due to capital controls imposed by banks people are limited to withdraw 300 euro daily. In addition, it is not allowed to take more than 1,000 euro cash abroad and credit card spending abroad is limited to 5,000 euro a month.
According to some anonymous sources, several Russian companies that used Cyprus banks for offshore tried to siphon the funds off the island. Nevertheless, the operations caused them troubles as some other countries have limited money transfers from Cyprus. In particular, on March 26, the ECB urged Latvia authorities to impose a ban on money transfers from Cyprus made by Russian companies.