Staff at the Cypriot banks have been affected worse than most. Many of them borrowed money to buy shares in the bank, now worthless, and now fear losing their jobs and their pensions. The Bank of Cyprus is overstaffed and many Laiki staff are being transferred there. Many employees fear losing their jobs and are uncertain about their future.
By William Kremer
5 April 2013
Cypriot savers are furious with their banks, but staff at the now-defunct Laiki Bank have been affected worse than most. Many borrowed money to buy shares in the bank - now worthless - and fear losing both their jobs and their pensions.
"You wouldn't wish this to happen to your worst enemy," says Andreas Chrysafis. "All this anxiety, seeing your staff desperate, your kids not understanding what is happening."
Like everyone else in Cyprus, Chrysafis has spent hours queuing outside ATMs over the last three weeks.
The fact that he was himself a manager at one of the Cypriot banks at the centre of the crisis made little difference. While the banks were closed, petrol stations stopped accepting credit cards, so if you wanted to drive you had to wait in line.
"Everybody's thinking about themselves," he says. "Everybody has to figure out how to feed their family, how to send money to their children who are studying, how to pay for schools."
During that strange, fraught fortnight before branches re-opened, the commodity in shortest supply was sympathy for others - and especially for managers at the debt-ridden banks.
"Nobody cares about the bank," says Chrysafis. "They have accused us of getting a lot of money, of being highly paid - they say we are bad."
A well-dressed man aged 53, tanned and with trendy aviator sunglasses, Chrysafis doesn't look like a desperate man, and indeed he isn't - yet.
But he and his colleagues from Laiki Bank now find their jobs on the line.
Laiki, also known as Cyprus Popular Bank, has been wound up as part of the bailout deal agreed with the EU. The bank's debts and all savings over 100,000 euros (£85,000 or $130,000) will be dumped into a "bad bank", while savings under 100,000 euros and most of the bank's assets will be transferred to the Bank of Cyprus.
A senior IT manager, Chrysafis will also be transferred to the Bank of Cyprus along with 2,300 other local Laiki staff - but he is deeply uncertain about his future.
"The Bank of Cyprus is already overstaffed, so why should they take us and not keep their own people?" he asks.
It isn't too much of an exaggeration to say that Laiki Bank has been Chrysafis's whole life. He has worked there for 28 years. His mother and sister-in-law also worked at the bank, and he met his wife, Thenia, there too.
This is not unusual in Cyprus, where the finance sector accounts for around 45% of the country's GDP. Closing down the second-largest bank on the island is a little like closing a pit in a mining community.
Besides the job insecurity, the Chrysafis family's finances are critically exposed in several ways.
"As employees we were unofficially forced - we were told that it was a good thing - to buy shares in your bank to support your bank," Andreas explains.
His sister-in-law, Fadoula Voskou, remembers being pressured to keep her shares, even as Europe's problems with sovereign debt loomed into view.
"The director called us into a small conference room, and told us that it would not be… well, it would not look good on our resume if we sold those shares," she says.
Voskou later found that this same director sold his shares shortly after that conversation.
But a more pressing issue for Voskou and the Chrysafis family than the now-worthless shares is the money they borrowed to buy them - about 70,000 euros (£60,000 or $90,000) is still outstanding in Andreas and Thenia's case.
These loans were issued by Laiki itself, but the debt has now been transferred to the Bank of Cyprus.
"My wife has been crying for three or four days now saying: 'Why should we pay and not them?'" says Andreas.
It was revealed last week in Greek media that Laiki, the Bank of Cyprus and the Hellenic Bank forgave loans amounting to millions of euros to companies, local authorities and individual politicians.
There is also the issue of the Laiki pension funds.
Andreas and Thenia have around 650,000 euros (£550,000 or $850,000) in their combined pension pot. Last week, following demands from the unions, President Nicos Anastasiades said that every effort would be made to safeguard this money.
But a rumour is spreading through the ex-Laiki workforce that their pension funds will be at least partially converted into shares in the Bank of Cyprus. Although this bank's short-term future is guaranteed, some foresee a possible run on the bank as strict restrictions on withdrawals and transfers are lifted. The rumours are prompting continued unrest.
"Quite a few people saw this coming," says Andreas.
A big change occurred when the Greek company Marfin Investment Group (MIG) took over Laiki Bank in 2006, he says.
"They transformed the Bank from a conservative bank to a bank that was ambitious and expanding all over the place," says Chrysafis. "The first thing they managed to do - they gave everybody a 2,000 euro (£1,700 or $2,500) bonus because we 'did a good job'. And we wondered: 'What did we do?'"
The bonus was followed by big salary increases, he says. In the brave new world of the MIG-owned Laiki, nobody dared complain.
"If you complained then you are considered to be a loser or to be a conservative or not to be part of them - so, all in all, nobody talked about it."
To see entire article CLICK HERE