News / Europe

Cash, Not Plastic, Rules in Financially-Strapped Cyprus

A man makes a transaction at an ATM outside a branch of Laiki Bank in Nicosia, March 21, 2013.
A man makes a transaction at an ATM outside a branch of Laiki Bank in Nicosia, March 21, 2013.
Reuters
Forget the plastic. In Cyprus, cash is king.

"I plan to have at least 1,000 euros on me at all times," Constantinos Tsissios, a 34-year-old banker, said at a downtown ATM in the capital, Nicosia. "We've taken as much out as we could,'' he said on Thursday. "You don't know what might happen over the next few days.''
      
Five days after Cyprus's panicked leaders ordered banks to close their doors, the fate of the financial system hangs in the balance and credit cards are going out of fashion. 

Reluctant to accept the promise of payment from customers, shop owners say wholesalers are demanding cash on delivery. Some gas stations, too, are refusing credit cards. Retailers with only Cypriot bank accounts are struggling to ship supplies in from abroad. Gentlemanly arrangements are bridging the gap.

"Because of what's going on, the suppliers ask for a small amount, say 50 percent, in cash, so they can meet their costs,'' said Federico Basonidis, a 25-year-old worker at a kiosk selling cigarettes, newspapers and sweets.

Spooked by an aborted bid to tax their savings, Cypriots are fast losing confidence that their money will still be there when - or if - banks re-open, on Tuesday at the earliest.

Rumors on Thursday that one teetering bank would be allowed to fall saw lines grow at ATMs at a downtown branch, as staff behind locked doors replenished cash machines. Some of the bank's employees, fearing for their jobs, faced off with riot police outside parliament.

A protester tries to pass a police cordon during a rally by bank employees in Nicosia, Mar. 21, 2013.A protester tries to pass a police cordon during a rally by bank employees in Nicosia, Mar. 21, 2013.
x
A protester tries to pass a police cordon during a rally by bank employees in Nicosia, Mar. 21, 2013.
A protester tries to pass a police cordon during a rally by bank employees in Nicosia, Mar. 21, 2013.
​"We have children studying abroad and next month we need to send them money so they can eat,'' protester Stalou Christodoulido said through tears. "We'll lose what money we had and saved for so many years if the bank goes under.''

Marinos Panaretou, a 36-year-old retail manager, said he had withdrawn a maximum 500 euros every day since Saturday. "People feel safer if we have cash on us because you don't know what you're going to wake up to,'' he said.

Saturday was the day news broke of a proposed levy on savings to raise the 5.8 billion euros Cyprus's lenders at the EU and International Monetary Fund want in exchange for a 10-billion euro lifeline to keep the island financially afloat.
       
Keep the faith?

With Cypriots and foreign depositors, many of them Russian, threatening to empty the banks, lawmakers on Tuesday overwhelmingly rejected the levy, in a stunning rejection of the kind of strict austerity accepted by Portugal, Ireland, Greece, Spain and Italy over the last three years of Europe's stubborn debt crisis.
       
Cypriot leaders were working on a "Plan B." They have until Monday to produce, or the European Central Bank says it will sever the emergency liquidity line keeping banks alive.

Christos Phasarias, 63, estimated he had lost thousands of euros worth of orders at his car parts and accessories store.

"We need to bring some orders in from abroad and they're all standing by waiting for the transfer to be made so that the goods can leave,'' he said. "There's no bank to make the transfers, so we can't receive parts on time. It's going to be a disaster.''

Adamos Hadjiadamou of the Association of Cypriot Supermarkets said that the majority of suppliers had suspended the customary practice of providing goods to stores in return for payments received through credit and checks.

"We see this as unjustified,'' he told Reuters. "What do we want to do? Destroy the market completely?''
       
At one gas station, pump attendant Tassos Spingas turned away two motorists who did not have cash. "How will I know if there's money in the account, when the banks are closed?'' he asked.
       
Others kept the faith.

"We don't have any problems,'' Stavros Stavrou, chairman of national flag carrier Cyprus Airways, told Reuters. "We've come to an understanding that we'll make payments that should have been made as soon as the banks open.''

You May Like

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Role in Fighting IS Carries Domestic Risks

There are Western concerns Islamic State militants soon may unleash offensive in kingdom that could create upheaval - though nation has solid intel, grip on banking system More

Asian-Americans Enter Public Office in Record Numbers

A steady deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid