JUNE 2013
elsewhere. Probably out of the Eurozone. Offi ces will shrink but maybe to a more acceptable, sensible size. The people who work and live in Cyprus love it here. I don’t think they will leave. “We saw, maybe, a 15% increase in hotel bookings year-on-year to March 2013. This, for obvious reasons, has not continued, but we still experienced a 5% year-on-year increase into April. We hope to maintain a small increase through the coming diffi cult times.”
ON THE GROUND
An afternoon spent wandering the streets of Paphos, chatting to expats, revealed nothing unexpected – a lot of anger, frustration and fear focused towards both the banks and the governments.
Andy Thorne, a British expat who’s been in Cyprus for 12 years, said, “I brought six years ago for EUR 160,000 and I’m now struggling to sell for EUR 110,000. I can’t see it getting better. The Cypriots may seem laid back about the whole thing but there’s a lot of negativity in the ex-pat community.” Russians have lost an awful lot over the course of this crisis. Rating agency Moody’s estimated that before the crisis began, Russian money accounted for nearly half of the entire amount of deposits in Cypriot banks – making up around USD 32 billion.
Small businesses who were, in one Russian’s words, “rash” enough to keep their funds entirely in the banks of Cyprus are suff ering.
FIGHTING BACK
It’s not only those already living in Cyprus who’ve been hit by this crisis. Thousands of UK people who bought property as holiday homes during Cyprus’s boom years are feeling the eff ects back at home. However, they are not suff ering in silence. Action groups have sprung up to try and claim compensation from Cypriot banks after losing serious amounts of money from (allegedly) mis-sold fi nancial packages. OPP talked to a spokesperson
from one of the Action groups who is leading a campaign of hundreds of UK citizens looking for compensation and assistance. As legal discussions
The Aphrodite Hills resort 09
are ongoing, we had to stick to general terms – but his is a story that will ring true for thousands. “Many of us bought in Cyprus in
around 2006-08. At that point prices were increasing 10% year-on-year. Cyprus was going into the Euro, and lots of the UK citizens were taken over by UK estate agents including MRI. I, along with many people, went to Cyprus to view properties and we were introduced to lawyers. We thought they’d be independent (not all were) and looking after our interests (not all did). “We were introduced to a
People who work and live on the island still love it
developer and to an English- speaking Cypriot lawyer. The Alpha Bank and others were involved in these arrangements.
“We’re talking about thousands of UK citizens. When we went over in late 2006 we were directed towards a Swiss franc mortgage because of the favorable interest rate available at the time. Unfortunately, we were only told one part of the equation – and we weren’t warned of the risks involved in foreign currency loans particularly those in Swiss francs. “Our mortgages were to be to
be payable 30 days after the hand- over. Around September 2008 – at that time the Swiss franc was going very strong against sterling – we became concerned about paying the mortgage each month. It was going up and up. “We started off with just a handful of UK citizens who were concerned. We wrote to the Alpha Bank saying that we were worried. We approached the bank and alleged that we were mis-sold a fi nancial product. We claimed compensation and we wanted our mortgages converted into sterling. The bank declined.
“We took legal advice and from there our group grew and grew. We started looking for support and we found out that thousands of people were in the same boat as us. I spoke to one person who was making all their repayments; but because of the fast appreciation, the mortgage was still going up. “Because Cyprus and UK are both in the EU, if somebody falls into arrears the bank can enforce recovery of arrears in the UK. Not only could people lose their property in Cyprus, but they could also lose their homes in the UK. “We’ve spoken to representatives of the British government and they have been helpful and supportive. “We’re looking for a solution from all angles. That could be from many sources. We’re open-minded about where assistance comes from. We just need help.”
www.opp-connect.com
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