Tuesday

5th Jul 2022

Interview

Cyprus: 'the insecurity has been incredible'

  • Laiki customers are still in the dark about their accounts (Photo: laiki.com)

Twelve years ago, Roddy Damalis decided to leave South Africa where he was running two restaurants and return to his home country, Cyprus.

The chef set up base in the southern Cypriot town of Limassol, where he opened up a restaurant and started organising a cooking workshop on Mediterranean cuisine.

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Speaking to EUobserver on Monday (25 March) over the phone, Damalis said all his accounts are with Laiki, the bank that under a fresh bailout deal agreed earlier that morning in Brussels will be completely "wiped out."

"I am protected, because both my business and my personal account are under €100,000," he said.

Under the bailout deal, Laiki depositors below €100,000 are to be taken over by the Bank of Cyprus, another banking mammoth whose clients will have to take a hit.

But Damalis admits he is still being kept in the dark by the bank as to how this transfer will proceed and how much he will have on his bank accounts in the end.

"The insecurity has been incredible over these past 10 days," he said, in reference to banks having been kept closed since 16 March. "There had been some rumours before, but nobody thought the situation would spiral out of control like that. It was like a horror movie."

Damalis said he refused to take part in the "panic domino" that hit many of his co-nationals. Three of his restaurant suppliers told him they will only accept cash, but with Visa and Mastercard payments still working, he insisted they should continue using cards.

"I did not want to go down that road, which would have meant asking restaurant customers to pay in cash, too. So I cancelled those suppliers and found others who still accepted cards," Damalis recalls.

Given the uncertainty and wild plans of the past week - ranging from a tax on all deposits to nationalising pension funds - Damalis said "at least now people feel relieved that there is a decision, even if they don't agree with the terms of the bailout."

"Hopefully banks will open tomorrow, allowing us to continue to run our businesses. It is of paramount importance that we stay in our routines," Damalis said.

As for future plans, he said he does not regret having moved to Cyprus and will continue to stay there.

"But confidence in banks is low across the board. The European Union and the Cypriot government realise that, so we'll see a lot of restrictions to stem the panic withdrawals once banks re-open. It will take years to restore the confidence in Cypriot banks," he concluded.

Eurozone agrees Cyprus bailout 2.0

Cyprus' Laiki bank is to be wiped out. Depositors in Bank of Cyprus will also take a hit under a new bailout deal. But details remain sketchy.

Analysis

Cyprus 'business model' was no mystery to EU

EU politicians are saying Cyprus must scrap its "unsustainable business model." But data shows the writing was on the wall ever since the island joined the euro, five years ago.

Success of Cyprus deal depends on 'social consensus'

The success of the Cyprus bailout deal will depend on the social consensus around it, says Brussels, with the island's GDP expected to dive as the size of the banking sector is drastically cut.

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