The capital controls imposed by Cyprus are hard to square with the idea of a "single" currency. To plug holes in the island's massive banking sector, its government has penalised uninsured bank deposits, and has thrown capital controls into the bargain to prevent nervous depositors from rushing for the exits. Cypriots may take no more than €300 ($385) out of banks each day and no more than €1,000 with them off the island. Transactions larger than €25,000 require central-bank approval. Deposit flight has been modest relative to expectations, and controls may be as temporary as promised. Yet recent history suggests cause for concern.
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