What Bailout? Six Reasons to Love Cyprus
The tiny country made global news after a controversial new bailout was announced. But bank runs aside, there’s plenty to love about the Island of Love, writes Kevin Fallon.
Over the weekend, European official announced a rescue package for Cyprus that’s stunned the world—and not to mention the island country’s citizens. Dealing with overextended banks and a faltering economy, Cyprus turned to the European Union and the International Monetary Fund for help. The bailout that was announced included—shockingly—a levy on all bank deposits. That means a tax of 6.75 percent to 9.99 percent will be taken on the deposits of every single person who has money in the banks in Cyprus, the first time such a measure has been included in a bailout.
As Cypriots raced to take their money out before the tax hits, questions flew: Will a run on banks be triggered in other vulnerable countries, including Spain and Italy? Will PSI (private sector involvement) become common in future bailouts? And, most importantly, what’s the deal with Cyprus?
Here, a quick primer on the small Mediterranean nation that’s gripped global headlines.
It’s kind of two countries.
Though idyllic-seeming to the casual tourist, Cyprus has actually played host to a decades-long turf war between its Greek and Turkish citizens. Violence between the two parties led to an attempted coup d’etat by Greek Cypriot nationalists in 1974, with the goal of overthrowing the government in an attempt to unite the nation with Greece. Turkey used this as pretext to invade the northern part of the island. All of this resulted in the partitioning of the island between a largely Greek area—which comprises the southern two-thirds of the island—and a northern area administered by Turkish Cypriots. The “Turkish Republic of Northern Cyprus,” however, is recognized only as a state by Turkey. A 112-mile U.N. Buffer Zone, known as the Green Line, separates the two areas.
Like really small. At roughly 3,500 square miles, Cyprus is barely half the size of Connecticut. It’s population—1.1 million—is about that of the Bronx in New York City. Need more perspective? Hawaii is four times its size and South Dakota—the 47th largest state—has more residents.
It’s the island of the love.
Cyprus is nicknamed the Isle of Love because it is the mythical birthplace of Aphrodite. She’s supposed to have risen out of the water there at the Petra tou Romiou. In fact, Cyprus has a long history with famous lovers. Mark Antony supposedly gave the island to Cleopatra as a gift, and King Richard the Lionheart wed Queen Joanna there in 1191.
It’s really, really nice there.
The island attracts over 2.4 million tourists per year, making it one of the most popular tourist destinations in the Mediterranean. What’s the big draw? The weather, for one. The sun shines 340 days a year, and summer can last for eight months. Cyprus may also be one of the only places in the world where visitors can tan at the beach one morning and hit the ski slopes the next. The Troodos Skiing Resort is one of the Europe’s most southern ski resorts. Mount Olympus has enough snow for skiers for three or four months of the year.
It has really old wine.
Cyprus is known for its sweet dessert wine, called Commandaria. It’s rumored to be the oldest named wine in the world still in production, as it’s been produced for 4,000 years. (Yes, it was served at the wedding of King Richard.)
Some famous-ish people are from there.
Being so teeny-tiny, it shouldn’t come as surprise that, aside from Aphrodite, of course, Cyprus hasn’t really birthed that many famous people (famous in the U.S., that is). There’s Anna Vissi, a pop star who has sold more than 9.5 million records around the world. Vissi had one hit song here that went to number one on the Billboard Hot Dance Club Play chart in 2005. (It’s called “Call Me.” It’s…not very good.) Marcos Baghdatis was a sport stud for a minute. The tennis player went to the Wimbledon semi-finals in 2006 and was the runner-up at that year’s Australian Open. Currently, he’s ranked number 37. There’s the billionaire Stelios Haji-Ioannou, who founded Easyjet airline, but now he reportedly lives in Monaco. Cypriots also like to take credit for George Michael, whose father is from Cyprus—but the “Faith” singer was born and raised in England.