Over the weekend, European leaders announced a surprise bailout package for the country, which would include a tax on cash deposits.
We now know that banks will be closed until Thursday, which has the potential to create a slew of other problems.
We reached out to Elena and Theodora Papageorgiou, who run the Cypriot restaurant Zenon Taverna in Astoria,
They claim their relatives were already being told they couldn't withdraw funds before the bailout announcement.
While their family has enough to make it through the week, they fear what will happen once banks reopen.
Most of all, they are outraged by the indiscriminate way rich and poor alike will suffer under the terms of the bailout.
Here's a transcript of our Q&A, edited for clarity:
BUSINESS INSIDER: What's the current situation like in Cyprus?
PAPAGEORGIOU FAMILY: When my mother spoke to [her relatives] a few days ago, they told them that they weren't able to withdraw any money from the banks. I think everyone knows the banks being closed is temporary, and although they use credit cards down there, a lot of people, especially the old generation still use mainly cash, and maybe visit the banks 1 time every 1-2 weeks. I think the panic is more from outrage that their money is going to be taken, than the fact that they need money right now for their day to day expenses.
BI: How will your family in Cyprus be affected?
PF: Certain people in my family will be affected more than others. My grandparents are well into their 80s and are refugees (IDPs) from (Turkish-) occupied territory since the invasion of 1974. Their accounts are on the smaller side and unfortunately, their financial situation is not being considered in this, as well as other refugees and the older generation. Their only income is their pension, which is not much to begin with and has already been reduced. As for my cousins, aunts/uncles, they are already suffering. The job market has taken a drastic hit and many are already without a job. By taking away from their savings, and no additional income coming in, they are going to fall into an even worse situation.
BI: Do you think the bailout will improve the country's economic situation?
PF: If done properly, the bailout may help. Unfortunately, the chances of a debt being paid back are very slim, and the recent closing of the banks have brought people's movements and spending to a standstill. Once the banks reopen, I am pretty sure everyone is going to race to try and remove as much money as possible. The way the bailout has been proposed, it seems it will lead to the destruction of the people because it will make it impossible for the country to ever come out on top.
BI: What do you think needs to be done long-term to fix the country's finances?
PF: There is no easy answer to this question because any and all solutions will have consequences. Having discussed this issue with Cypriots here in the states, many people have said they would voluntarily give some money if it would help the country. Although it is difficult to say how much money can be raised this way, it would be voluntary and people wouldn't feel like their hand was forced and their government was trying to steal their money. This may be impractical though, I'm nowhere near an economist so I can only really say based on what I heard and what I've been discussing with fellow Cypriots. If a loan can be taken that wouldn't cripple the country or make them vulnerable and in debt for the rest of the foreseeable future, this is would be ideal.
Also, it would be nice if we aren't hearing that our president was forced into agreeing to terms that are in no way agreeable. I'm sure there is a lot we don't know, and we will never find out about, but it would be good if for the first time in Cyprus' history, the EU, our government, and any other governments involved thought about their population and the well being of the older generation, in addition to the rest of the citizens.
Note: I also think its important in this not to forget the the political problems of the island. When talking about finances, the occupation of the island is quickly forgotten, but this is the reason so many people are struggling. Many people were unable to recover after the invasion and make back the fortune they had pre-invasion.
The decades of hard work from our ancestors was all lost in the invasion, and now they are left with the little they were able to acquire while rebuilding their lives from absolutely nothing, while trying to survive with their families. Adding this to the current economic problems, and people are devastated all over again.