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Marinos Panaretou, a 36-year-old retail manager, said he had withdrawn a maximum 500 euros every day since Saturday.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

Video Obama to Send 3,000 Troops to Liberia in Ebola Fight

At Centers for Disease Control and Prevention, President says US will take leadership role for a global response to deadly Ebola virus that is ravaging West Africa More

Video China Muslims Work to Change Perceptions After Knife Attacks

Muslims in Kunming say that they condemn the violence, it is not a reflection of the true beliefs of their faith More

Humanitarian Aid, Equipment Blocked in Cameroon

Move is seen as a developing supply crisis in West Africa More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA Picks Boeing, SpaceX to Carry Astronauts Into Spacei
X
September 17, 2014 4:20 AM
The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid