Prominent Greek Cypriots have met to discuss paying potentially substantial contributions to a national solidarity fund
Prominent Greek Cypriots living in the UK are exploring the possibility of a private bailout plan to help their homeland amid growing concern at the impact of the financial crisis on the country's 60,000-strong Cypriot-born community.
As trading links between Cyprus and the UK were hit hard by the crisis, bankers, accountants and entrepreneurs with links to the island have met to discuss paying potentially substantial contributions to a new national solidarity fund.
Several wealthy Greek Cypriots living in the UK have already indicated their willingness to donate, according to Peter Droussiotis, a barrister and financier who is president of the National Federation of Cypriots in the UK.
"We are meeting to discuss ways in which the British Cypriot community here could take action to help the island," he said. "I know several people who have invested in Cyprus and some are saying that if necessary they would be inclined to make a contribution. I have had that sentiment expressed to me by several business people of Cypriot origin."
UK Cypriot travel agents reported a fall in bookings to the island's resorts and the owner of Cypressa, an importer of halloumi cheese, said he could not pay suppliers because of bank closures.
Ejection from the euro would worsen the situation dramatically for those with business links, and British Cypriots with investments, savings and pensions in Cyprus face significant losses if their assets are raided to secure a €10bn European bailout.
Droussiotis said his federation is also hoping to harness the influence of British Cypriots who have risen to senior roles in the City and academia to provide advocacy for the island over the coming weeks.
UK-based Cypriots who have made fortunes include Theo Paphitis, the retail multimillionaire, and Chris Lazari, the West End property magnate who has an estimated wealth of £600m, but Droussiotis declined to say who had indicated willingness to help. He said there was "considerable anger" in the British Cypriot community at the treatment of the country by the European Union, which he claimed amounted to "blackmail against a sovereign state in the European Union".
"There is a strong bond between the community and Cyprus through tourism, the import of Cypriot food and property that is owned in Cyprus," he said. "There is a lot going on between here and Cyprus and all of those people have been affected."
Not all those who have done well believe it is right to intervene. Stelios Haji-Ioannou, the founder of Easyjet, who is now based in Monaco, is understood to be reluctant to invest because, a spokesman from his office said, he fears the country will soon be ejected from the euro.
Tony Yerolemou, the owner of Cypressa, said he did not believe UK Cypriots would be able to provide sufficient funds to help. He flew to the country on Thursday and said local business people appeared willing to bail out the country with more than 10% of their deposits and would be willing to lose 30% in order to avoid ejection from the euro.
"We can't pay anyone in Cyprus at the moment," he said. "Long term, it is going to be a huge mess."
Middlesex-based Noel Josephides, chairman of the Association of Cypriot Travel Organisers, said he stands to lose savings in Cyprus in any "haircut" deal and his father would lose part of his pension savings, but he still believes it would be wrong to send funds to support the country because of the "incompetent" behaviour of the county's political leadership.
"The solution is to accept a haircut and all behave a bit more sensibly than we have up to now," he said.
While banks in Cyprus remained closed to avoid a run on deposits, branches in the UK were operating as normal. The Bank of Cyprus UK Ltd is a UK-incorporated bank with depositors protected by the UK's financial services compensation scheme. Laiki Bank UK said deposits are protected up to a total of €100,000 by the Cyprus Deposit Protection Scheme, operated by the Cypriot government, which itself is facing bankruptcy.
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