“I’ve been queuing since 11 am and it has been very calm because people just want to do their business and go home … We want to keep our dignity and show all of the foreign media filming us that we are a civilized nation.” (Yioryos Theodorou, queuing outside a Laiki Bank branch on the first day of opening of Cypriot banks; reported by Cyprus Mail).
Cyprus has received a lot of bashing during the last ten days. Many of the criticisms are valid but exaggerated.
The Cypriot banking sector is definitely inflated, but the accusation (advanced by French Finance Minister Pierre Moscovici) that Cyprus is a casino economy is far-fetched. The Cypriot banking sector has for the most part been taking advantage of the same regulatory loopholes regarding capital flows, especially those in transit, that are in use in other financial centers like Frankfurt, Luxembourg, Switzerland, London or New York. The specific problem of Cyprus has been one of size (the country’s economy is very small in comparison to its banking sector and output) in conjunction with the absence of effective controls.
Undoubtedly, many rich people have used Cyprus as a tax-haven. Many of these, but not all, are Russians. There are also several rich Cypriots or Cypriots in high positions who have broken the law at various instances, and this justifies the set up of a criminal investigative committee, as announced by the Cyprus government, to look into these issues. Such measures are long overdue – but better late than never.
It should also be said that the Cypriot victim and trickster mentality, an attitude rooted in the twin collective experience of colonialism and war, has facilitated the consolidation of shadow-economic practices.
And still … there is another side to Cyprus and other narratives than those of rich elites and nouveau riches enjoying cocktails while bathing in the sun.
- T., an older man, past seventy. As a young man he took flight from the Turkish invasion of the North, lost everything, had to start anew. With the help of a low-interest loan for refugees he managed to build a new house for his family. He repaid it timely, and continued to put money aside from his modest salary, and that of his wife, in order to support the education of his children, since he believes education is the only thing ‘one cannot take away from you.’ His pension is far from generous and he fears cuts—the rumors have it these could be as high as twenty to forty percent. The little money he still has in the bank is a security – as he does not wish to become a burden to his children when the time has come to move into an old people’s home.
- M., a young woman from South Asia. She has been working in Cyprus as household help since a couple of years. Her salary is meager according to European or even Cypriot standards, just over three hundred Euros, yet this is a significant amount of money in her country of origin. M. receives her wages in cash at the end of the month, proceeds on the same day to transfer most of it to her family with Western Union. She now worries she might be losing her job. Her employer is a single-mother with two children who also fears for her job.
- I., a Russian woman in her early forties – she has migrated to Cyprus five years ago with her husband who has a middle-level management job at an offshore company. She does not know much about his job other than that he works hard and travels a lot. He earns reasonably well so that she does not have to work and the children can attend a private English school. Nonetheless, she would like to get a job so as not to be fully dependent on her husband. She has begun to learn English and Greek. Last night her husband called to say he is considering migrating back to Russia. The prospect frightens her.
Stories like the above are as real as those that have been circulating in the media during the last days. As with other crisis-stricken nations, this is perhaps something to be kept in mind before passing judgment.