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Russians say Cyprus good life is worth it, for now

After the initial shock of the Cyprus banking crisis left them feeling victimised, Russians enjoying the good life in “Limassolgrad”‘ say they have lived through far worse.

The family benefits of island life are on show everywhere in Cyprus’s second biggest city with its large Russian population, and the attitude is as breezy as the gentle wind that plays along the Mediterranean seafront.

That is despite the fact that the many Russians stand to be among the biggest losers from a levy on deposits in failing banks that is being imposed as part of an EU-IMF bailout.

“The money is leaving but not the people. Many, like me and my family, are waiting to see this out,” said Slava Mishin, 42, a financial services employee who lives in Limassol.

He said the Cypriot part of his business — a Saint Petersburg-based group with a branch in Cyprus and which has assets in the stricken Bank of Cyprus — had been frozen and he has taken a hit.

“Nobody can trust the banking system in Cyprus again,” he said, but added that while many Russians have been among the prime targets, few are leaving the island.

“We are here because of the climate, because of the same religion, the language — we can use English — because we are not far from home, and we want our kids to grow up in a safe environmment and have a European education.”

He was stoical about latest developments.

“I grew up in the Soviet Union,” said Mishin.

“I saw perestroika and we lived through 15 years of turmoil. What is happening in Cyprus cannot be compared to what happened during the breakup of the Soviet Union. Life will go on here — we will not panic.”

Russians have some $31 billion in corporate and private deposits parked in Cyprus and Moscow reacted angrily when it first emerged that they could lose part of their money under so-called “haircuts” demanded by the EU.

Finance Minister Michalis Sarris warned Tuesday there could be levies of up to 40 percent on holdings over 100,000 euros ($130,000) at the Bank of Cyprus, its biggest lender, and Laiki, the number two bank which is being wound up.

Capital controls imposed by the Cypriot government after the crisis erupted have stopped people moving money out of the country, also blocking any panicked mass exodus.

Limassol’s mayor Andreas Christou has said the town is likely to take the biggest hit from the bailout because of the large number of foreign businesses, especially Russian ones.

But at Pascucci, a smart seafront coffee shop in Limassol popular among Russian housewives, the mood was equally calm.

Natalia, 39, a trained economist who is married to a Russian company executive, said the situation in Cyprus was “absurd”, especially the more than 10-day closure of the banks.

“Like many other Russians, I came here for the sea, the good weather and fresh air for my children. That is still here,” she said. “If the (international) school doesn’t close down, we will stay.”

Natalia and her two companions said they had all lived in Limassol for at least 10 years and first met at Greek-language lessons. Their families had not been directly hit by the “haircut”.

Anna, a 38-year-old from the former Soviet republic of Belarus, said she would “sit it out and see what happens.”

“It wasn’t paradise, but there was stability and we knew what to expect for tomorrow but now we don’t know what the future will bring,” she said.

But Jana, 32, a former physical education teacher from Russia housewife married to a Cypriot businessman, admitted she was “worried for my kids and about Cyprus.”

— Not big deal for Russians —


Alexey Voloboev, 40, who owns a restaurant and runs Russian Wave radio station in Limassol, said he does not expect his compatriots to take flight in large numbers.

“For Cypriots losing money is a big deal, but for Russians it’s a usual situation,” said Voloboev, a Russian with a Cypriot passport through investments.

Voloboev, whose Taras Bulba restaurant is named after a Ukrainian folk hero, said he started noticing the downturn six months ago, in advertising revenue for his radio station:

“People had plenty of warning about Laiki and that it was in big trouble. Anyone who knows anything about finance, they had time to move and take their money out,” he said.

Cypriot businesses agreed there was no sign — yet — of Russians leaving.

Sergio Thoukis, 59, who runs a Limassol-based removal company, said he hadn’t received any business from Russians since the crisis started two weeks ago.

“They have to give 30 percent back but why worry when they’ve been receiving good interest (rates) all these years? They can take the hit,” he said. “Behind closed doors, the government will offer them incentives to stay put.”