Cyprus institutes capital controls

The government of Cyprus has introduced draconian restrictions on capital to prevent a bank run and capital flight.

The Prodigal Greek blog reports on the capital controls Cyprus is introducing:

Here is what a cash economy looks like:

  • Restrictions in daily withdrawals
  • Ban on premature termination of time savings deposits
  • Compulsory renewal of all time savings deposits upon maturity
  • Conversion of current accounts to time deposits
  • Ban or restrictions on non cash transactions
  • Restrictions on use of debit, credit or prepaid debit cards
  • Ban or restriction on cashing in checks
  • Restrictions on domestic interbank transfers or transfers within the same bank
  • Restrictions on the interactions/transactions of the public with credit institutions
  • Restrictions on movements of capital, payments, transfers
  • Any other measure which the Finance Minister or the Governor of Cyprus Central Bank see necessary for reasons of public order and safety

That's how you prevent a bank run, I suppose. But it does rather limit the benefits of actually being in the euro in the first place.

We'll see if it works – where "works" means prevents total collapse of the Cypriot economy, because even the damage imposed by these measures is something most nations would rather avoid – when the banks reopen, which is currently expected to happen on Monday.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.