Post by Focus on Mar 29, 2013 6:04:58 GMT
Under a fierce spring sun in the Cyprus capital of Nicosia, Maria Ioannou, a British mother of two, queued outside a bank yesterday to discover if she still had a Euro to her name.
The 35-year-old accountant from North London soon learned the devastating truth. She, and her husband, Michael, have lost their savings of £135,000 (160,000 euros) because of the banking crisis on the Mediterranean island.
‘Our dreams of building a house here in Cyprus, giving a good life in the sunshine to our two young children, have been shattered,’ said Mrs Ioannou, near to tears, after an hour’s appointment with the manager of the Cyprus Popular Bank, known locally as Laiki.
‘When he showed me details of our deposits, they had been stamped with the words: ‘Account blocked’.
Maria Ioannou, a British mother of two has lost thousands in the Cyprus banking crisis. Pictured, an elderly woman looks at a savings book as people wait in line at a bank in Nicosia, Cyprus yesterday
Mrs Ioannou had waited her turn outside Laiki in the smart suburb of Pallouriotissa alongside a long line of Cypriots, a handful of Britons, and a young African.
When the promised bank opening at midday was delayed by half an hour because of a computer glitch, shouts rang out among the increasingly angry people as they pushed towards the doors, guarded by policemen drafted in to stop violence and protect staff.
On Wednesday night, five shipping containers filled with billions of Euros are reported to have been flown to Cyprus from Frankfurt and delivered to the island’s central bank to ensure money did not run out.
A helicopter and police cars guarded the armored cash convoy, thought to have been sent by the European Central Bank, on its way from the airport.
Strict new rules have been imposed to stop a run on Cyprus banks which yesterday opened for the first time since the island’s economic meltdown started nearly a fortnight ago.
A woman gestures as she waits outside a Laiki bank branch in Nicosia. Mrs Ioannou (not pictured) and her husband have lost £135,000
Airports have are now searching passengers and stopping anyone trying to leave the country with more than 1000 euros (£845) and daily cash machine withdrawals are limited to 300 euros (£250).
The clampdown, agreed by the Eurozone finance chiefs in exchange for a 10billion euro bailout (£8.5 billion) to the island has hit Mrs Ioannou and other depositors at two banks, Laiki and the troubled Cyprus Bank, at the heart of the crisis.
Depositors with both banks can keep 100,000 euros (£84,000) but will lose all deposits above this amount to finance the island’s contribution to the rescue deal.
It is the first time that a bailout condition to a Eurozone country has included the raiding of depositors’ accounts, a decision that has infuriated the islanders.
Mrs Ioannou put more than 200,000 Eeros (£168,000) in the Laiki bank after selling her house in north London and de-camping to Cyprus a little over a year ago with her husband, and their two children, a son aged four, and daughter of one.
She has now lost half of this money.
Michael, a research scientist gave up a plum post at an English university and also put 160,000 Euros (£135,000) of his savings in the same bank. He learned yesterday that he will lose 60,000 Euros (£51,000) of the money.
‘We have not been able to sleep at night with the worry’ said Mrs Ioannou outside the bank yesterday. ‘I nod off for ten minutes, then wake up in terror at what has happened to us. My husband is devastated.
'The funds we deposited included money given to us as a wedding present by our family and friends.
‘We have bought a plot of land in Nicosia and have paid for architects to design a house with a garden, which is a rarity in the capital. Now we do not have the money to build the house.
'We will have to stay in our rented three bedroom flat. I wish I had never sold my terraced house in London, which will have gone up in price since.
‘Michael went to Laiki two months ago because was worried about rumors that the bank was in trouble. He said he wanted to withdraw the money he had brought to Cyprus from Britain and send it back to the UK, where he still has an account with a High Street bank.
A security guard, right, stands in front of a bank. There were angry scenes at banks across the island yesterday
‘The Laiki official sat him down and told him not to worry. The official said he had money deposited in the bank too and nothing was at risk. He persuaded Michael to keep the money there.
‘We have worked hard. We have saved our money and not taken risks. Now we will have to start all over again. My parents who live in London and were refugees to Britain after the Turkish invasion of Cyprus in 1974 say this is a ‘Second War’ that those living here are facing.’
Like many Cypriots and Britons, Maria says she was attracted to the Laiki bank by a deposit account which offered something called a ‘monthly step up plan’.
This allowed her to withdraw money each month to pay for architect’s costs and other outgoings as she planned the new house. It also offered an enticing interest rate of between 3 and 5 per cent - far higher than the current ones offered in the UK.
Rage : Thousands of Cypriots protested against the harsh treatment imposed on Cyprus. The new agreement will see massive savings raids on those who have more than 100,000 Euros deposited in banks
‘The bank was still advertising this “step up plan” on the Friday two weeks ago that the banks closed at 1.30 and the crisis began,’ she says with fury.
In a further cruel twist, Maria was told yesterday that a 200,000 euro loan she and Michael, who was born in Cyprus, have taken out at the bank to help build their house will still have to be repaid.
‘So we cannot use some of our “confiscated” funds to pay that off,' she said. No, the bank has taken that and we will end up paying for a loan for years for a house that we cannot afford to build.’
She is just one of hundreds of Britons caught up in the Cyprus banking crisis that is threatening financial stability across the world.
Those who have settled on the island last night spoke of their fears that they will not be able to sell their houses (which had already slumped dramatically in price before the current crisis began) without making a significant loss.
Many believe that they couldn’t now get their money out of the country even if they could get rid of their properties.
Our dreams of building a house here in Cyprus, giving a good life in the sunshine to our two young children, have been shattered, said Mrs Ioannou
Terry Rose, a 67-year-old retired Army warrant officer, moved to Cyprus five years ago from Leeds in Yorkshire with his wife Hazel. They bought a newly-built home in the picturesque village of Pyrgos, perched on a hillside above Limassol where 40 per cent of the inhabitants are British.
‘If I sold the house now it would be at a loss. But how would we move the money out of Cyprus back to the UK anyway?’ he asked.
‘We are stuck here. I like Cyprus, but the choice of where we spend our retirement years has been taken away from us, just like that.’
The Roses have an 100,000 euro investment bond lodged with the island’s Alpha bank which has so far avoided the worst of the troubles.
They had put it in the bank to pay for unexpected medical bills as they grew older.
However, after the banking crisis blew up two weeks ago they began to worry that their money was not safe. Like all the others, the bank shut its doors. Staff did not return Terry’s emails or calls.
He explained: ‘Lots of English people are frightened now and want to sell up. Many are retired people like us.
'At our time of life we should be enjoying ourselves. Instead we are worried sick that we are trapped here.’
Yesterday David Rumsey, of 3D Global financial advisers in Cyprus, warned that it is responsible people who carefully invested savings in the island’s banks who are now being hit by the controversial bailout plan.
‘It is ordinary people, both Britons and Cypriots, who are paying the price.'
Certainly those in the bank queue, including Mrs Ioannou, seemed to prove his point. Stavros Shaelis a 61-year-old Cypriot businessman runs a small company importing plastics to the island.
He had hoped to get permission to pay his suppliers through his Laiki account.
Cash flow : The ban shut-down hammered businesses, which have been without access to their funds for two weeks
‘I have not been caught by the 100,000 Euro confiscation, but I have not been able to do business for a fortnight because the banks have been shut. It has been difficult.’
And Ibrahim Bunduka, a 22-year-old Sierra Leone football professional playing for a Cypriot club was also waiting patiently. ‘I have 30,000 Euros in my account here,’ he said. ‘I want to get it out and send it to a bank in the UK. I am afraid of losing my savings after what has happened.
‘For months now the club has not been paying my salary on time. I feared the island had financial problems. I want to move to London this summer when my contract is over and take my money with me.’
When and how he will ever be able to do so remains to be seen.
Wrong -- bloody WRONG!! - Fx