Limit search to available items
Streaming video

Title Foreign Correspondent: Cyprus
Published Australia : ABC, 2013
Online access available from:
Informit EduTV    View Resource Record  

Copies

Description 1 online resource (streaming video file) (27 min. 10 sec.) ; 164429008 bytes
Summary Imagine how you'd feel waking up one morning to discover that much of the money you'd put in your bank for safe keeping had been withdrawn. And not just by some opportunistic fraudster. A substantial slice of your savings, your company's accounts, even your pension fund had been compulsorily acquired by the venerable Central Bank. Cypriots don't need imagination. It's happened. They call it - with all the black humour they can muster - The Haircut, but it's less of a trim and more like a scalping. It has grave repercussions for Europe and the rest of the world.Cypriots can be a spirited, passionate bunch but if you lobbed on to their sundrenched Mediterranean island home right now you're likely to see and hear those passions running higher and louder than usual. They're variously shocked, outraged, in denial or mired in despair. The reason? They put their hard earned money into the bank and a bigger bank took it.It's an extraordinary transaction, sending shockwaves through other nations wrestling with epic debt and being forced into deals with the European Union to stay afloat. If this kind of thing could happen in Cyprus then surely it could happen anywhere "rescue" deals are being done.ABC Economics specialist Stephen Long joins Foreign Correspondent to explore the profound implications of one of the most destabilising, destructive deals done in the course of the European Financial Crisis. Long travels across the island nation and meets people trapped by a national crisis that everyone agrees guarantees, not just recession, but depression. Businesses are closing, the construction industry is frozen and sackings have begun. Unemployment, currently 15%, is predicted to surge to more than 30%. Wages are being cut by as much as quarter.So why is Cyprus, a rocky island nation of 800,000 people suffering such extreme financial pain - much worse than any of its fellow heavily indebted European nations - Greece, Ireland, Portugal and Spain? The man who signed the deal - Cyprus' former Finance Minister Michael Sarris - says it was out and out bullying by The Troika - the European Union, the European Central Bank and the International Monetary Fund. "We had a gun on our forehead, being told (by The Troika) we are going to pull the trigger. If you do not accept an arrangement like this then you have to accept the complete ruin of your economy," recalls Sarris who resigned soon after the agreement."They'd let the banks fail, smash the economy, unless you accepted the haircut?" asked Long. "Absolutely, yes," declared Sarris. It is not only Cypriots who are suffering. Tens of thousands of foreigners, Russians, Britons and other Europeans have been lured to Cyprus during recent decades. Sunshine, low taxation, relatively cheap real estate and a British style legal system were all incentives to relocate from chilly northern climes. Real estate Izabella Vinogradova says many wealthy Russians brought their money to Cyprus because they'd had bad experiences with Russian bank failures. But the seizure of their bank deposits has smashed the faith of her clients in Cyprus. The price of mansions on the rocky heights above the port city of Limassol have crashed. "For Russians the matter of trust is the most important thing. They will move money from Cyprus but they don't know where. They no longer have trust in Cyprus." - Izabella Vinogradova, Real Estate AgentCypriots though have no choice but to have faith in themselves to endure the pain and to recover. They've done it before, they say, almost universally citing the events of 1974 when the northern third of the island was seized by the Turkish military, causing a huge number of Greek Cypriots to seek refuge in the south. Can they survive The Haircut?
Event Broadcast 2013-04-30 at 20:00:00
Notes Classification: NC
Subject Bankruptcy.
Europeans -- Economic conditions.
Financial crises -- Economic aspects.
Investments, Foreign -- Economic aspects.
Layoff systems.
Unemployment -- Economic aspects.
Cyprus.
Form Streaming video
Author Long, Stephen, host
Demetriou, Yioula, contributor
Georgiou, Sotiroula, contributor
Patsillides, Luis, contributor
Pitsillides, Barbara, contributor
Polyviou, Georgia, contributor
Sarris, Michael, contributor
Vinogradova, Izabella, contributor