Cyprus bailout: bracing for hard times ahead
Cyprus has become the fifth eurozone country to seek economic assistance from Europe in a bid to protect its financial sector, which is heavily exposed to the Greek economy.
Here people in the country discuss their concerns over the state of the economy and how their day-to-day lives have been affected.
Eric Papaeracleous, 52, shop owner, Limassol, Cyprus
I have a small business in Limassol, a souvenir shop in the old town area where there are tourists always around.
End Quote Eric Papaeracleous
If it wasn't for Russian tourists I would be out of business”
I can tell you with certainty that if it wasn't for Russian tourists I would be out of business.
I'm just about managing to survive because of the increase in Russian tourism.
One costly expense here is the high interest rate banks charge to give loans or a credit line to businesses, from 7% to 9%.
It's hard to feel sorry for the banks - they will be bailed out with the help of the government here or the EU.
Who will bail us out? There will be no help from anyone, we will simply be out of business.
We knew the government would need to ask for this bailout. It's been on the cards for about a year because Greece have been having difficulties and obviously we're very exposed to their banks.
There's no growth here and a bailout would bring austerity measures. I'm not sure how austerity would affect me. The public sector can manage a 5% or 10% loss though. Their workers are well paid compared to the self-employed.
I see hard times ahead for Cyprus unfortunately.
Costa Ioannides , 36, editor of finance magazine, Nicosia, Cyprus
These are challenging times for Cyprus. A lack of cash flow has had a severe impact on business.
End Quote Costa Ioannides
A bailout isn't all bad news, it could have a very positive impact on the size and cost of the public sector”
People are very insecure about their jobs. Many fear being laid off as cost-cutting measures take hold. Since the property boom, people have been borrowing heavily against the value of their house, so the mood here is very pessimistic. Four out of ten people close to me have been made redundant or had to change occupation in the last eighteen months.
There are deep structural problems within our labour market. The public sector is largely unproductive - we've not moved with the times. For example, the government keep all of their records in hard copies instead of using an IT system to integrate departments. They're concerned automation will lead to job losses.
On the high street businesses that have been around for many years are now empty. Restaurants, clothes shops and convenience stores all have "To Let" signs outside.
This time last year I thought we'd ask for a bailout. A bailout isn't all bad news, it could have a very positive impact on the size and cost of the public sector. I hope it will act as a catalyst for change, bringing Cyprus into the 21st Century.
David Blain, 57, former trader, British expat in Paphos, Cyprus
We're all very concerned over the current state of Cypriot banks - I'm not at all surprised by Cyprus' decision to apply for aid from the EU.
End Quote David Blain
What an embarrassment for Cyprus given that they take over the presidency of the EU on 1 July”
Most of the expat community around Pathos are retired people living on fixed pensions that can't be changed.
The general cost of living has rocketed and the biggest cost is electricity.
Many expats living here on fixed incomes are not going going out as much as they used to due to money concerns, which is having a direct impact on local businesses.
Many of my friends are withdrawing their deposits and putting money into non-Cypriot banks because they don't trust the banking system here.
The prospect of Cyprus leaving the eurozone will affect people's pockets directly.
What an embarrassment for Cyprus given that they take over the presidency of the EU on 1 July.
Interviews by Sarah Fowler and Jonathan Griffin