Many British expats living in Cyprus have been enraged to find out that they do not have access to the money they have deposited into local banks due to the Cyprus bank bailouts. Near the end of last month, thousands of expats were told they would be unable to withdraw money from their accounts with Cyprus banks and were instructed to instead use money from their British accounts. Even online transactions could not be completed as a result of the fiasco.
The issue was not only inconvenient, but was also a huge shock for expats who never even thought this would be a possibility. One expat interviewed by CNBC, Jean Stark, stated: “It was a huge shock. We hadn’t expected it all as it hasn’t happened in any of the other countries that have been bailed out.”
The Pensions Department placed a halt on all payments indefinitely. To make matters worse, expats were not dealt much information on how to handle the issue. The Pensions Minister Steve Webb suggested that people make payments with a British account or open up a new one.
Web told MPs, “We are advising customers to change the bank account into which payments are made, for example by nominating an alternative bank account or the account of a ‘trusted friend’.”
Web further advised that by doing as he suggested, payments would be able to be deposited sooner. He urged Cyprus bank account holders not to close their accounts.
The expats who have sunken all of their retirement savings into Cyprus banks in hopes of living out their retirement there are finding themselves at a lost. The fear of losing a significant chunk of their savings has several soon-to-be-retirees very upset. Terry and Hazel Rose are two UK expats living in Pyrgos, located in southern Cyprus, who have been affected by the EU bailout. Terry worked for the British Army for decades, and has over 100,000 euros in bank deposits. Now the Roses stand to see a levy of up to 40%. When asked by Sky News about how he felt about the situation, Terry responded: “It’s disgusting, it is my money, fair enough if you want to tax money people have earned in Cyprus but this is mine.”
Hazel Rose echoed Terry’s thoughts and expressed her newly developed distaste for Cyprus, “We love Cyprus, don’t get me wrong, but this is the final straw. Sometimes I wish we’d never moved out here.”
The issue has decreased the consumer trust in banks as well. The owner of Taste of Britain Café and deli in Limassol, Ann Bruce, states that she has heard countless stories of expats who have been negatively affected by the bailout. She stated, “It is frightening that the banks, an official organisation, that for years we have trusted, now you can’t trust them anymore.”
There are definitely lessons to be learned from the incident in Cyprus. It’s extremely important to carefully examine any country that you plan on moving to or retiring. As an expat, it’s easy to become completely engulfed in the local culture. While many expats were affected by the bailout, there were still an estimated 6,000 people who were not affected because they still held British bank accounts.
So while you may live in a different country, it’s important to maintain roots in your home country to be safe.
Einat Mazafi is the owner of NY International Shipping, an International Shipping and moving company based in New York. She is also a specialist in providing the best relocation solutions to clients worldwide.