Saturday, March 23, 2013

Cyprus: Day Six (Saturday)

Friday has come and gone.

It was a day of talk and discussion.  The idea of the tax on account holders?  It's back to the front, and probably the ultimate solution now.  The Russians and their loan deal is off the table....period, no discussion.

The new talk?  Well....this is mostly around the idea of the tax, but starting to center on the idea that anyone with a small account (100 Euro or less) might skip out of the tax entirely, and those with bulky accounts....end up with a twenty-percent tax.  You can imagine the hostile nature of the Russian billionaires but since Russia wasn't going to help in the loan business....they aren't exactly a good buddy of Cyprus now.  No love lost....would be a good term to use.

After almost a week, there's a number of signs being reported by various media groups that grocery stores and pharmacy operations are starting to suffer.  You can buy anything....unless you show cash.  In a modern society, you can't run a business operation on cash just doesn't work.

From the Cyprus Mail (the better of sources for news on the isle)....the reports indicate Fridays chief accomplishment of splitting bank operations off into good banks (with small investors, 100k Euro or less) and bad banks (over 100k Euro).  You as the customer....had no say in the matter, after they passed the bill into law.

The German angle today?  There's a fair amount of hostility brewing within the public sector, with feelings that Germany is the stumbling block to achieving any solution.  One of the comments came out of the bank employees at one location....talking up their point....."We are not Germany's slaves".  It's hard to judge how this motivates everyone on the island about Germans and the amount of tourism that occurs.

In a normal year, there's around 2.1 million tourists to arrive on Cyprus (statistics used from the 2011 World Economic Forum).  From this group....roughly 131k German visit the island for at least a week.  The UK carries the bulk of the tours, with almost a million Brits coming to Cyprus.  If you figure a couple flying in, staying at a beachfront hotel, consuming a fair amount of beverage, and eating out for each meal, then riding tour buses or rent cars....there's probably around 1,500 Euro spent by each guest for their visit.

Getting upset and dumping onto the Germans for the long-term....probably isn't smart. But if you've been living for the past week on minimal cash and worried over your future....well, you've got some reason to whine.

What's left for this weekend?  I suspect the big investors are screwed when a tax is implemented. They've lost their cash and will be determined to yank what they can out....within the next couple of weeks.  Cyprus will save Cyprus, and it's citizens....but damn the Russians.  It's a simple solution in the end, if you think about it.

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