Jobs next to go as banks face disaster

While an agreement on a bailout may stave off immediate disaster, many Cypriots said the measures will shatter confidence in the island's hugely profitable banking and financial services industry and lead to a massive exodus of investors, among them Russian tycoons and British retirees.

While an agreement on a bailout may stave off immediate disaster, many Cypriots said the measures will shatter confidence in the island's hugely profitable banking and financial services industry and lead to a massive exodus of investors, among them Russian tycoons and British retirees.

Islanders also fear that as the bank levies bite for savings over €100,000, businesses and big investors will have to start laying off staff, heralding high levels of unemployment.

About 70 per cent of Cypriots work in the financial services and banking sector, which dwarfs the 20 per cent in tourism.

"I think a lot of people will be out of work soon and looking for jobs. The young people, especially, will go abroad because you can't live with this level of uncertainty," said Ioanna Constantinou, who is employed in the financial services industry in Nicosia, the Cypriot capital.

"The banking sector is finished, we have lost all credibility - who is going to want to bring their money to Cyprus now?" she said.

Restaurants in the city's picturesque old town are normally jammed, but at the weekend many were close to empty. Outside Parliament, protesters had stuck placards to a fence. "Europe You Failed Me", said one, another read: "Draghi is Dragging Us Down", a reference to Mario Draghi, head of the European Central Bank.

"The lesson from what has happened is 'get your money out of Cyprus'," said lawyer Simos Angelides. "We had the Turkish invasion in 1974. This now feels like the German invasion of 2013. This is going to be a second 1974. People will leave the country."

Anti-German sentiment is running high, with many Cypriots accusing Berlin of making an example of Cyprus as a warning to larger debt-laden Mediterranean economies, including Italy and Spain, that the German taxpayer will no longer stomach bailing out ailing economies in southern Europe.

"They are punishing us and making sure the rest of Europe sees. It's a public whipping. The only question is, who's next?" Mr Angelides said.

Many accuse Germany of trying to bring the country to its knees in order to beat the Russians to billions of dollars in natural gas believed to be offshore.

"We have been forced to slap the Russians in the face, even though we didn't want to," said journalist John Leonidou. "We have always been important strategically, from the time of the Venetians, the Ottomans and the British.

"We are slap-bang in the middle of Africa, Asia Minor and Europe. The gas reserves makes us even more important. But as a commercial centre, we have been destroyed. We will have to pull off a miracle to bring back our credibility."

Related Articles