Tuesday, April 2, 2013

Troubles in Cyprus aka (former Tax haven) paradise

As I was flying back from Portland to Larnaca in about two days I heard about the Cyprus bank crisis in a Oregonian newspaper, CNN, Dutch news channel, Financial Times, Romanian English News paper, my MSN account's news banners, having in mind I barely ever watch TV unless is on at the airport and only scan newspapers on flights.
The news is definitely out, Cyprus is in a deep freaking s.... mess.
The origin of the crisis is very simple. Face Cyprus with Lebanon on the back and then turn left.
Bingo!
Greece of course.
If you are curious, a simple if a bit more detailed explanation here
Bottom line is there was too much Russian money to be invested and Cypriot bankers were playing Monopoly like Teddy Ruxpin.
And now what? What will you do if your bank asks you for 7-10% of your savings in order to pay for their and the Government not so wise decisions.
You won't be happy, right. No one is.
I am only losing EUR200 and am moderately pissed off, but people have much bigger problems, pension, mortgages, salaries not being paid.
Last Thursday afternoon the banks finally reopened and queues were promptly formed in front of my local Laiki and Bank of Cyprus

This morning after 3 day weekend, it looked like this downtown:

Losing thrust in the banking system people want to get their money out, understandably. 
My online banking doesn't work. ATM have daily limits and I was just asked to pay school fees in cash.

I was a bit surprised that the Russians refused to bail Cyprus out, although it makes total Business sense.
 The small VIP airport was packed with private jets on Thursday with the big guys from Moscow coming to collect their cash in suitcases. 
Some people say Russia will cease using Cyprus as a tax haven all together. I am not so pessimistic. 
We all hope the oil starts flowing soon. And there is still the Tourism. 
Meanwhile, let's just hope that they implement all the measures fast and efficient and move on. 
And first rule in Monopoly when facing Cyprus with Beirut on the back, remember not to turn left. Ever again. 

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