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Impact of Cyprus banking crisis minimal for expats

The headlines were full of the woes of the Cypriot economy in March this year, but much of the predicted hardship has bypassed expatriates living on the island.

Customers of the two biggest banks in Cyprus saw millions of euros stripped from their savings and austerity measures put in place.

The €10 billion (£8.4 billion) bailout by the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) was newsworthy, but what of the expats on the ground?

Expats living in Cyprus did not flee when the news broke in March and many did not have their cash tied up in the system.

Carl McCann, an expat on the island, told the Telegraph: "The talk is all about gloom and doom, but in my opinion Britons living here tend to keep their savings back in the UK or elsewhere."

Many believe that the situation has been overstated and services such as accountancy, shipping and legal work have fared well due to their basis in the international market.

There are also a number of new developments that have been built with foreign buyers in mind, showing how the island is looking abroad for investment.

April and May did see a dip in the property market, but this had recovered by July and the government has introduced a number of incentives to lure foreign buyers to the island.

These include a cut from 18 per cent VAT to five per cent when someone from overseas purchases a property for their own use.

Vasilis Hadjivassiliou, partner at PricewaterhouseCoopers in Limassol, said: "The property market is seen as a pillar of the economy by the government."

In November the EC, ECB and IMF released a statement saying the economy is doing better than expected and that Cyprus is on course to meet the terms of its bailout.

It said: "All fiscal targets have been met with considerable margins,… prudent budget execution, and a less severe deterioration of economic activity than originally projected."

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