Christmas shopping plunges alongside Cyprus economy

Nicosia's main shopping artery Makarios Avenue has strung up its Christmas lights but many stores have pulled down their shutters while others are practically empty, reflecting Cyprus' poor economic state. Malls on the outskirts of the capital are still thriving, but many Cypriots fear the entire Mediterranean island, exposed to debt-ridden Greek banks, will follow in Makarios Avenue's footsteps before too long.

“A few years ago you'd have to pay up to 500,000 euros ($660,000) in key money to set up shop on Makarios. Now, next to nothing,” said Christos Styliou, owner of a sports store and a games shop.

Styliou's revenue has plummeted 60 percent in a year, and he has had to let most of his staff go, make his own sales and deliveries, and keep stock at home so as not to pay for storage.

“Many of our clients lost their jobs, some had their salary cut by half,” said veterinarian Georgios Gakos whose clinic is located in an upmarket area of the capital.

“One who was coming once a month (to groom his dog) now comes just for the annual injections.” Dean Millard, a British craftsman who moved to Cyprus 26 years ago, owns a second-hand shop.

“People come to try and sell their furniture,” he said.

“The Cypriots are too proud to say it's because they need the money, but I know they do. And I can't help them. The only second hand things that sell now are appliances like fridges and washing machines.” Millard has also had to fire staff and his store barely breaks even on its expenses.

He tried to extend his bank loan for his business, but with interest rates of 10.5 percent, he decided to borrow money instead from family.

A banker, requesting anonymity, told AFP that many clients were asking for loan extensions but these could not always be granted because of the decline in the value of assets such as real estate.

“A flat worth 100,000 euros ($130,000) before is now worth around 70,000,” she said.

The country has seen 5,000 small- and medium-sized businesses fold in the past three years, according to Alekos Tryphonides, a member of the centrist Diko party and a civil service union leader.

Unemployment has leapt to 12 percent of the working age population, without counting thousands of immigrant workers or illegal aliens.

Last week Cyprus's biggest supermarket chain Orphanides, swamped by debt, went into receivership, threatening the jobs of hundreds of its employees and suppliers.

And in the public sector, 72,000 civil servants may in 2013 see a 15 percent cutback in their salaries, already frozen this year. The government has even had to draw from pension funds just to afford December's payroll.

VAT and tax on cigarettes and fuel are increasing, as has the cost of electricity since an explosion in July 2011 that destroyed the island's main power station.

Many of Cyprus's inhabitants talk of emigrating, saying how a friend, a cousin or a neighbour has already gone to Australia, Germany, Russia. Greece, however, is no longer an option.

AFP