Expats in Cyprus in shock over government savings grab

Tens of thousands of expats, members of the British Armed Forces, second home owners and those in the process of migrating to Cyprus are in shock following the announcement of a tax grab on their savings. As part of the agreement on an EU bailout package for the troubled island, the Cypriot government agreed to levy a tax on all private bank accounts held in its banks.

Those with over €100,000 will lose 9.9 per cent of their holdings and those with under that amount will lose 6.75 per cent.The news broke last Saturday morning, and sent thousands of depositors rushing to ATM cashpoints to withdraw as much as was possible.

The machines soon ran out of cash, leaving holidaymakers and residents alike with no means of getting money. Due to today’s national holiday, the banks remain closed, and an emergency parliamentary debate and vote on the measure was postponed, with no reason given, and the banks may remain closed for several more days to avoid a run by panicking account holders.

Many Cypriots are blaming the considerable Russian presence on the island, with most saying that it’s money-laundering by Russian gangs which has prompted the astounding move. More than 25 per cent of deposits in Cypriot banks have been made by members of the Russian community.

As many as 60,000 British expats and second home owners are believed to be affected, although the UK chancellor has announced that members of the armed forces serving on the island will be protected. Around £1.7 billion of British deposits are thought to be at risk, with an estimated $170 million up for the government grab.