March 16, 2013: The EU announces a bailout of Cyprus, and banks close to prevent a run
The president and the minister of finance were reassuring us that there would be no question of a haircut on deposits. Then came an announcement on Saturday that the banks would be suspending their operations because there was going to be a haircut.
Everyone was horrified. People were running to the ATMs trying to get cash out because they were worried they’d be stranded without funds. The market just froze. The only things that worked were the supermarkets, because people always need to eat.
We stopped production for a few days [Demetriou owns vegetable oil maker Ambrosia Oils] and gave people time off. We didn’t want to deliver without knowing that we were going to get payment. We didn’t believe the banks would stay closed so long.
Cyprus is a close-knit community. I don’t think anybody was in danger of starving because they couldn’t get their hands on cash. It’s the feeling that you can’t access your own bank account that makes you panic. People with their savings—you can understand the psychological effect. What’s going to come next? How much of our money are they going to take?
Because of the crisis, we’re down to about 85 employees, from 100. It’s forced us to become more efficient, to review how we work. There’s a lot that can be gleaned from crisis situations. Obviously, they’re not desirable, but when they do happen, there are benefits that can be reached, things you can think of doing that you never would have thought of doing without an ax at your throat. — As told to Stephan Faris