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

Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
Arts and Entertainment
The eyes have it: Kate Bush
music
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
Al Pacino in ‘The Humbling’, as an ageing actor
filmHam among the brilliance as actor premieres two films at festival
News
Fifi Trixibelle Geldof with her mother, Paula Yates, in 1985
people
Arts and Entertainment
Downton Abbey fans rejoice, series five returns later this month
TV
Arts and Entertainment
booksExclusive extract from Howard Jacobson’s acclaimed new novel
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
Latest stories from i100
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

VMware Infrastructure Engineer - (VCP, VMware) - £45k, London

£45000 per annum: Ashdown Group: Infrastructure Engineer, VMware (VCP, NetApp,...

Business Development Manager

Salary/Rate: £32,000/annum: M&E Global Resources Ltd: Description/Main Duties ...

IT Systems Manager

£40000 - £45000 per annum + pension, healthcare,25 days: Ashdown Group: An est...

Application Support Analyst / Junior SQL Server DBA

£40000 - £45000 per annum: Ashdown Group: An established professional services...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor