Russian shopkeepers, small businesses and middle-class expats are among the victims of the island’s financial meltdown.
Although Russian savers of all descriptions, from private individuals and small businesses to corporations and institutions, have suffered in the Cypriot financial crisis, the effect is seen most starkly among the thousands of Russians actually living on the Mediterranean island.
Here, it’s not oligarchs but middle-class entrepreneurs who have been devastated by the crisis, and the EU-imposed “haircut” on deposits of more than $130,000.
“My business is more dead than alive,” says Anton, the 32-year-old owner of a foodstuffs distribution network in Limassol. “I was rash enough to keep all the company’s money in the Bank of Cyprus.”
It’s an all-too-common tale from middle-class Russians living and working in Cyprus, of whom there are 30,000 to 50,000 – mostly businesspeople, executives, and the Russian wives and girlfriends of Cypriot nationals.
The seizure of deposits has hardly touched Russian oligarchs: Thanks to the intricate structure of holdings registered in Pacific and Caribbean tax havens and ingenious schemes of share distribution, the oligarchs’ money accounted for an insignificant share of deposits held in Cyprus banks. Instead, it’s small and medium-sized businesses that were most often caught out.
Georgy, 52, owner of a Russian goods shop in Limassol, says his business hasn’t been doing well since the last financial crisis in 2008.
“The more you squeeze foreign investors in the financial institutions of your countries, the better for us, because the affected, offended and frightened (not all of them, but many) should, as we hope, come to our financial institutions and keep their money in our banks. I am even glad, to some extent, because these events have shown how risky and insecure investments in western financial institutions can be.” ~~~ Vladimir Putin, President
Like other Russians interviewed, Georgy was reluctant to give his surname, because of suspicions among Russian businesspeople about talking to the media.
“I can’t imagine how I will pay the suppliers, the rent and the bills… we have far fewer customers, and they buy only the bare necessities.”
In this respect, Russians living here have been affected much the same as ordinary Cypriots, and Russian small and medium-size entrepreneurs mostly provide work for Cypriots.
Alexander, 40, managing director of a shipping company, says most of its 80 Cypriot employees – operational staff, logistics specialists and accountants – will probably be fired, or have to take deep pay cuts.
“The company is still operating, our ships continue to carry fertiliser, but the company has no capital left,” says Alexander. “Shock, horror and depression prevail.”
The other emotion, naturally, is anger – that the Cypriot and European authorities could conspire to seize depositors’ money in a way that Russian businesspeople would hardly expect of bankers back home.
“The seizure of deposits is simply expropriation, which I thought only the Bolsheviks were capable of,” says Anton. “To put it simply, this is daylight robbery, gentlemen.” More>>Russia Beyond The Headlines