Cyprus Looks to Its Past for Economic Reboot

(LONDON) — As it grapples with the prospect of years of economic pain, Cyprus will try to draw strength from its not-so-distant experience of invasion — and the fact a whole generation knows what it means to rebuild from scratch. But it’s a tough task. Any inspiration will be badly needed on the small east Mediterranean island nation of under a million people, as even the most optimistic forecasters predict years of recession and sky-high unemployment. In many ways, the challenge facing Cyprus now following an international bailout that effectively wipes out a hefty chunk of the banking sector is more daunting than the events of 1974 when the island was split into an internationally recognized, Greek-speaking south and a breakaway Turkish north, following Turkey’s invasion in the wake of an attempted coup by supporters of union with Greece. The country’s room for maneuver is limited, given that it has already largely exhausted the potential for development from a primarily agricultural state. (VIDEO: TIME Explains: Cyprus And The Eurozone Bank Bailout) And any reboot of the economy of the Greek-Cypriot side — the part of the island that has joined the European Union and is afflicted by the recent bailout woes — will have to be done within the limitations of a colossal debt mountain, a collapsed property bubble, a sclerotic European economy and a seeming dearth of international sympathy. “It’s an economic tragedy this time and the difference is you don’t know where it’ll end up,” said Andreas Georgiou, 80. “This could stir social unrest, people are worried about their families, putting their kids through school. In 1974, we had support from the outside, our people were willing to go abroad and find work to send money home. But could this happen again?” Such doubts are on the minds of many Cypriots, even as the resilience shown after 1974 provides grounds for encouragement. Following the invasion, Turkey ended up with control of nearly 40 percent of the island and much of its economic potential. Greek-Cypriots were largely cut off

READ THE ORIGINAL POST AT business.time.com