Cyprus Facing 30% Unemployment Amid Crisis

By Tom Parmenter, Sky Correspondent, in Nicosia

Cyprus is facing a recession so deep that 30% of people may find themselves unemployed.

The EU bailout means massive restructuring of the financial system, the inevitable loss of many investors and thousands of people seeing their jobs disappear.

Professor Hari Tsoukas, a business analyst, told Sky News: "Unemployment is likely to at least double from 14% to at least 25% and possibly up to 30%. Not so long ago it was just 5%.

"It is a huge challenge now facing the Cypriot people, we have been resilient before and we will need all that again," he added.

For a week now people have been rationed to how much they can withdraw from cashpoints.

Wages have not been paid, businesses have been unable to pay suppliers and the whole economy has seized up.

Banks have been closed since March 16 but Cyprus' president Nicos Anastasiades has said they will reopen on Thursday.

A woman and child beg for money in Nicosia

However, he added that the island will introduce some limits on transactions to prevent a huge outflow of money.

Politicians have been struggling to come up with a plan that would raise enough funds to qualify for an international bailout.

In a televised address to the country, the president said: "The central bank will implement capital controls on transactions. I want to assure you that this will be a very temporary measure that will gradually be relaxed."

He did not specify what limitations would be imposed on transactions.

He said he had taken "painful decisions to save the country from bankruptcy" and pledged Cyprus "would find its feet again".

It follows a bailout deal which reports suggest could see Bank of Cyprus savers with deposits above 100,000 euros (£85,000) hit with a levy of "around 30%".

In a smart fourth floor apartment, Sky News met one Cypriot woman prepared to show us where she has been stashing her money.

Fearful of losing control of her cash by leaving it in the bank she now has a daily routine of hiding it in drawers or cupboards around her bedroom.

She didn't want to be identified but said: "You just want to know your money is safe, this is quite small scale but it is all I can do."

Her flat was burgled last year so she is taking no chances - every time before she leaves home for over an hour she collects together her growing stash of notes and takes it with her stuffed in her handbag.

She hates having to do it but while banks remain closed some people feel they have little option but to take control of their own money.

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