Cypriot finance minister Michael Sarris maintained this week that the capital controls accompanying the €10bn Cyprus bailout deal would last only a matter of weeks.

This reminded me of the days when the UK economy was still hedged about by exchange controls and of Labour prime minister Harold Wilson’s notorious statement after the 1967 sterling devaluation that “it does not mean that the pound here in Britain, in your pocket, in your purse or bank has been devalued”.

Well, a definite consequence of the limits on transfers of bank deposits and cash withdrawals in Cyprus is that the euro in Cyprus has indeed been devalued. It is, in effect, a different currency to euros held in the rest of the eurozone. That flies in the face of the principle that a prerequisite of a monetary union is a free flow of capital across national borders. It also potentially weakens the stability of the retail bank deposit base of the eurozone periphery. For, while the circumstances of Cyprus, with an oversize financial system and a large Russian presence, are special, the horses will undoubtedly have been frightened all around the eurozone periphery.