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"Cyprus" "Greece" Are there warning bells ring

Posted by stephop - Created: 8 years ago
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10 replies (Showing replies: 1 to 10)

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Posted by Andyp-695384 - 8 years ago

Having just read TheTimesOnLine (uk paper) they have reported that within the last few months ten billion euros have been withdrawn by Greeks from their bank accounts within the last few months. In addition some Greek Banks have asked for Government assistance.

Will this not put severe pressure on the Cypriot Banks,some of which are Greek, to pursue outstanding developer loans or more concerning "home owners" to pay off these loans?

I think several of the earlier postings may well be right about the financial plight as this does sound a bit Northern Rockish or Bradford and Bingleyish.

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Posted by catmeister212 - 8 years ago

Greece and Cyprus need to get their churches to start paying taxes. That will bail them out big time.

The cyprus church alone owns corporate business, hotels, property developments yet they are excluded from paying most taxes. If you have been watching recent news, even the tax man says they owe something like 68million euros and the church is refusing to pay!!!

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Posted by Andyp-695384 - 8 years ago

I assume a nortgagesie is mortgage ie

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Posted by Andyp-695384 - 8 years ago

In my view there is a fudamental problem here in respect of which Cypriots,Brits, Russians,Germans will all be affected sooner rather than later.

American banks were taken down by sub prime nortgagesie bad debt. Similarly British Banks and in particular Northern Rock and Bradfor and Bingley. Icelandic Banks have also collapsed.

Who will end up paying the price? We depositors who else.

The Cyprus Banks cannot sustain funding developers and simply continue to reschedule their outstanding loans when they don't pay up. The property industry is in decline if not dead because the world now knows of the Cyprus title scam,which again we depositors are partially funding.

I think it is only a matter of time before a Cyp Bank goes down taking our deposits with it.

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Posted by douglas1-676196 - 8 years ago

Cyprus is suffering from a recession which is not unique to many other European Countries,a combination of exchange rates,quality of services,general lack of ajustment of pricing and air fares all have a knock on effect relating too tourism. On the home front Cyprus is currently carrying out exploration for oil and gas offshore and doing its best to reach an agreement to reunite the island.

With regards to UK residents returning home ,the overiding factor is the cost of living for individuls who are trying to manage on the UK State Pension, which happens to be the lowest in the whole of Europe due to the UK having a system to supplement State Pensions through a credit benifit sytem, which I understand is means tested,UK people living in Cyprus cannot apply for these UK credits which makes it difficult for some long term retirees to survive comfortably as in previous years.

If other European Countries like Greece fail to meet all their responsibilities and committments and need to be bailed out due to poor Government management ,it will certainly have a negative depreciation effect on the euro exchange rate, that in turn will have a positive effect on foreigners who are buying euro's.Since Cyprus has joined Europe they remain on a learning curve and will need to make many ajustments to previous business as usual ethics to allow Cyprus to adapt and meet all the new responsibilities,it must be understood that with the benifits of European grants to improve Cyprus infrastructure etc., comes other responsibilities and many new challenges which is the price you pay for joining the biggest gang in the World.

Douglas

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Posted by hi2tux - 8 years ago
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Posted by Limassol T - 8 years ago

Well, I agree that things are getting serious, but I think a balanced view is the following:-

The property bubble is bursting, development coming to a standstill. And the constant borrowing of locals to ""keep up with the Jones's"" does have to stop, and to some extent it will result in reposessions- it has to.

BUT, many Cypriots have savings also, so the effect will be a little cushioned.

It is good advice to not buy property at the moment- it is too expensive, and will likely drop in the next year or 2. But it doesnt mean the island is going to crash!

If there was any concern, it is that if the island was ever united, the cost of modernising the north could be crippling, as happened even with Germany.

But at least it will provide some work for construction!

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Posted by MariaEph320 - 8 years ago

Just a bit of inside information that i have received from various sources;

1. The problem in Cyprus is getting serious and banks are going to have to start repossessing property.

2.   "the UK government are in discussions to close the Army Base in Cyprus but keep the RAF base, not fiction, fact!" - True and within the next 5 years!

3. I was advised NOT to buy property here over the next 2 years as Cyprus is heading towards the same financial collapse as Iceland.

 

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Posted by Wingnut-669538 - 8 years ago

Nobody is saying that Cyprus doesn't have it's own set of financial problems

But these are very very different from Greece's set of financial problems, and attempts to link the two are short sighted and misinformed

The main problem in Cyprus is one of competitiveness. Prices are too high. In my opinion, the primary causes of this are twofold :

1) Euro entry and the profiteering that accompanied it.

2) Real estate bubble which pushed property prices into the stratosphere, thereby forcing businesses to increase their prices in order to be able to afford the astronomic renting or buying of premises.

We can add a third, good old-fashioned greed, but it's closely tied in with the first.

The property bubble here needs to be unwound, and quickly - as it is being unwound in the USA and Ireland. Only then will Cyprus look like good value for money again. The longer the banks hold off repossesions and keep extending bail-out loans to the developers, then the longer the crisis in Cyprus will go on. People will simply not buy at these levels, which has a knock-on effect on all other sectors of the economy.

P.S RICS first property survey of the island was released last week. Average cost of a house in Cyprus ? Half a million Euros. Insanity.

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Posted by Limassol T - 8 years ago

while there are always concerns, and all countries should take heed, I think the link being implied is tenuous at best.The connections basically are based on the language alone- the greatest effect will be that Greece will be unable to support Cyprus' efforts due to concentratuion on home events.

Spain is very close to going over the same precipice, but it doesnt mean that all spanish speaking countries will be affected.

There is a problem with the GDP ratio in Cyprus, but this is being addressed, and indeed the immediate trigger of going over the 3% ratio was averted pre Christmas, which would have brought EU monitoring in to effect. There are a number of countries in the EU that already have triggered this event, so currently, Cyprus is in a better position. For sure, safeguards need to be in place, and things need turning around (see recent finance proposals) but I think the advantage Cyprus has is that it has seen the problems coming maybe a year in advance.