Cash is king among traders as future of Cyprus hangs in the balance

Many suppliers are no longer accepting cheques, and cash is in short supply

Protesters shout slogans during an anti-bailout rally outside the parliament in Nicosia yesterday.  Photograph: Yorgos Karahalis/Reuters

Protesters shout slogans during an anti-bailout rally outside the parliament in Nicosia yesterday. Photograph: Yorgos Karahalis/Reuters

Wed, Mar 20, 2013, 06:00

Cypriots went back to work yesterday after a long, grim week end contemplating financial ruin and a three -day bank holiday with the expectation that banks may not open again this week. ATM s were replenished and performing but issuing limited amounts of cash. Cypriots and foreigners without credit or debit cards had no access to their funds.

A bearded man employed by the Nicosia racecourse begged Costas, co-owner of Ithaca Fruiteria green grocery, to give him credit until his salary cheque c ould be cashed. “See, I have money,” he cried as he waved his cheque. “I can pay as soon as the banks open.”

Costas said some wholesalers now wanted cash when they delivered supplies ; others continued to take cheques.

Costas Constantinou, proprietor of a normally crowded shop selling televisions, ovens, refrigerators and other electrical goods, had no customers. The pavement outside his shop, generally occupied by ranks of boxes and littered with packing material, was empty. He also said suppliers wanted cash, not cheques.

A visitor sitting at the cash desk repairing a plug pulled €20 from his pocket and remarked : “This is all I have.”

The manager of an outlet for Michelin tyres said his firm had accounts in “all the banks” but fear ed the two biggest, Bank of Cyprus and Laiki (Popular) Bank, may collapse over the next few days if the European Central Bank does not provide liquidity.


‘Sudden death’
Finance has become a Cypriot passion. My accountant, who asked not to be named, said: “We face sudden death if we do not accept the deal and a slow death if we do. The levies on bank accounts is the least of our problems. All the world now knows about Cyprus. Who will come and put their money here? ”

Although her clients were mainly Cypriots and foreign resident s, she expect ed many to pull their money out of the country . “The ‘big four’ international accounting firms are in deep trouble. They depend on foreign accounts, ” she sai d.

The head of a small consulting firm that deals exclusively with foreign west European clients said all had instructed her to transfer their money out of Cyprus. So far, none of her clients ha ve told her to close their companies but this could come.

Many Cypriots and foreign residents blame former Cypriot president Demetris Christofias and his Akel Communist party for drawing out negotiations with the EU-IMF t roika due to the opposition of powerful unions to economic restructuring .

It is suggested the t roika became fed up with the government and took the attitude that Cyprus was incapable of m aking the hard decisions required to rescue the failing banks and faltering economy.

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