Cyprus crisis: 'I'm scared for where we're all headed – it will be a bloody Tuesday'

The island’s banks will reopen next week for the first time since the crisis began. Nathalie Savaricas talks to panicked savers in Nicosia desperate to withdraw their cash

Dimitra Harilaou and her husband led a comfortable life in Nicosia. Her husband’s pension – he used to run a state prison – and the earnings from her electronic equipment store allowed the couple to put some money away in the bank for a rainy day. But after financial crisis hit the island a week ago today their savings, along with those of thousands of other ordinary Cypriots, are now under threat.

Last week, the Cypriot government caused panic when it agreed a deal with 17 eurozone finance ministers in Brussels to impose a tax of up to 9.9 per cent on deposits to qualify for the €10bn (£8.5bn) bailout designed to save the island from bankruptcy – sending people rushing to cash machines to try to withdraw their money. Though those with less that €20,000 in the bank were later exempted, the deal on the table could still see those with between €20,000 and €100,000 lose 6.75 per cent of their savings, and those with over €100,000 lose 9.9 per cent.

To prevent a run on the country’s banks, they have been shut since Monday, and are not due to reopen until Tuesday next week at the earliest.

Ms Harilaou, 59, says she plans go to the bank on Tuesday and withdraw as much cash as possible – though she’s well aware there will be a cap on how much of her own money she can take.

“It will be chaos, people will be queuing to get in the banks so we’ll have to get up very early in the morning,” she said. “I’m scared for where we’re all headed, as so many people will be mad not to be able to access their funds –  it’ll be a bloody Tuesday.”

Eurozone leaders, led by Germany, have offered Cyprus €10 bn on the condition it raises €5.8bn of its own.

The tax on savings was just one of the potential measures being debated in the Cypriot parliament yesterday, in a bid to bring Cyprus back from the brink of a financial meltdown and prevent it from being forced to leave the euro.

Despite the current crisis, Ms Harilaou says she believes the country needs to stay in the euro. “Going back to the Cypriot pound will be a return to Stone Age,” she warns.

She blames the country’s previous communist government for the mess, and lambasts all the so-called ‘Cypriot patriots’ who have said they are willing to give their savings to rescue the state.

Georgia, 23, works in a hotel. She says she first wants the situation to stabilise before taking any decisions towards her money. Georgia has managed to save €4,000 in the bank and does not believe she will lose it, though she says her family have started eating fewer meals because her parents – who she lives with – are uncertain about what the future could bring.

“We’re not panicking yet, but it’s better to be safe than sorry,” she explains. However, while banks across the island remained shuttered, many stores reported a serious drop in their takings.

Nikos’ supermarket in the heart of Nicosia, right opposite the city’s main bus station, has been operating for nearly 50 years – it had witnessed the Turkish invasion in 1974 – and yet nothing, says Niko, compares to the current financial crisis.

Though his shelves and refrigerators were still packed with foods and drinks for the moment, he is well aware that the cash shortage in Cyprus could soon lead to food shortages soon.

While savers can still remove cash from ATM machines, capital restrictions means Cypriots cannot withdraw more than €260 a day.

Nikos showed The Independent invoices from his suppliers, all of which read “Cash only” after cheque payments were stopped by authorities. With the limited cash available, he says he now must prioritise his orders and mainly buys staple food. “What’s the point of having nail varnish, when you don’t have milk?” he explains.

Nikos is one of the many Cypriots who is indebted to his bank, and says he believes a collapse won’t affect him. He also remains very weary of European help. “Protect me my friends because I know who my enemies are,” he said.

The demands from the eurozone – led by Germany – have led to a swell of resentment. A survey conducted by Prime Consulting found that six out of 10 Cypriots now support an exit from the Eurozone and strengthening of relations with Russia.

Despina, a saleswoman who joined protesters outside the Parliament in Nicosia for a second day yesterday said she would “rather starve than submit to the diktats of Germany.”

Her anger for the Cypriot government was equally boundless. “All politicians are crooks, what they’re doing is suicidal.”

Despina’s friend, Matina, has worked for 22 years at Laiki bank – which, if no ‘Plan B’ for raising the €5.8bn can be found by Monday, will be one of those affected by the Eurozone leaders’ threat to pull funding from the European Central Bank to Cypriot banks. The Bank of Cyprus and Laiki are reliant on this ECB lifeline, raising fears that they will collapse next week if no deal is reached.

Though the Cypriot Central Bank has denied that Laiki Bank is about to be shut altogether, Matina believes she will probably lose her job in the scramble to restructure the country’s banks – another measure intended to help avoid bankruptcy. 

“Germany has turned Cyprus into a laboratory where they’re testing what they didn’t achieve in Greece,” she said.  “But what this will only lead to, is the breakdown of Europe – no country joined this union to be a slave.”

Explainer: The deal on the table

The proposals currently under debate are aimed at both raising the money required by the troika and preventing financial turmoil.

The government plans to restructure Cyprus Popular Bank, known as Laiki. It is the nation’s second-largest lender, but racked up huge losses because of investments in Greece. The proposal is to split the bank into a “good bank” of modest deposits and a “bad bank” of deposits over €100,000 (£85,000). The “bad bank” account holders could lose up to 30 per cent of their money.

Creation of a “solidarity fund” is the second plank of Cyprus’s strategy to raise the cash. This would involve bundling together nationalised pensions and other state assets, including assets that the church has offered up to save the island from a default.

The Finance Minister also last night confirmed the country would again look at imposing a levy on anyone with over €100,000 in the bank. This was part of the plan agreed in Brussels last weekend, but there was fierce domestic opposition.  EU officials have little hope of raising the money needed without this measure.

The Cypriots are also looking to stop money flooding out of the country when the banks reopen on Tuesday.

Charlotte McDonald-Gibson

News
A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
science
News
Richard Dawkins dedicated his book 'The Greatest Show on Earth' to Josh Timonen
newsThat's Richard Dawkins on babies with Down Syndrome
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
Extras
indybest
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Travel
Dinosaurs Unleashed at the Eden Project
travel
Arts and Entertainment
music
Sport
football
Life and Style
This month marks the 20th anniversary of the first online sale
techDespite a host of other online auction sites and fierce competition from Amazon, eBay is still the most popular e-commerce site in the UK
News
i100
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Quantitative Analyst (Financial Services, Graduate, SQL, VBA)

£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...

Application Support Engineer (C++, .NET, VB, Perl, Bash, SQL)

Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...

C# .NET Software Developer (Client-Side, SQL, VB6, WinForms)

Negotiable: Harrington Starr: C# .NET Software Developer (Client-Side, SQL, VB...

C# Developer (Genetic Algorithms, .NET 4.5, TDD, SQL, AI)

£40000 - £60000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home