Tensions rise over Cyprus’ financial crisis

The Cypriot Parliament has been advised by the European Union and high profile bankers to raise the required 5.8 billion euros in order to be eligible for a bailout.

News of negotiations over attempts to raise the money have been confirmed by Christos Stylianides, a government spokesperson who said that there were “hard negotiations with the troika”; the troika being the EU, International Monetary Fund and the European Central Bank.

Cyprus’ Government have been facing a large amount of public pressure on the matter with protests occurring outside Parliament. Michael Sarris, the Cypriot Finance Minister had tried to obtain financial support from Russia on his trip to Moscow but failed. An alternative method of raising the funds needed was suggested which would mean the use of pension funds in order to save the country’s banks, however this has been met with strong opposition from Germany’s leader Ms Merkel.

Andreas Artemis, the Bank of Cyprus’ chairman commented, “ It should be understood by everyone… especially from the 56 members of parliament… there should not be any further delay in the adoption of the eurogroup proposal to impose a levy on deposits more than 100,000 [euros] to save our banking system.”

In response to this businesses within Cyprus have now started to decline card and cheques in favour of cash due to the uncertainty around the government’s decision on how to deal with the crisis.

There have been calls from within the Eurozone for Cyprus to reform its banking system which is currently too dependent on foreign investments. The crisis has caused foreign investors to be wary of investing money in Cyprus for fear of losing what they put in. Anton Siluanov, Russia’s Finance Minister said that there was little interest in the offshore gas reserves of Cyprus.

UK University Bans Payday Loans

In a recent move to protect their students, the University of East London have decided to ban payday loans from their campus completely.

This means that any magazines or posters advertising payday loan companies are now forbidden, as well as access to payday loan websites being completely restricted.

Officials at the university came to the decision after seeing that a number of their students were at a high risk of falling prey to payday loan lenders. Specifically, single parent students are considered to be at the greatest risk, especially when they are struggling to pay the bills and put food on the table.

Many of these single parents have been driven to desperate measures in the past, and it’s all too easy for them to get stuck in a vicious cycle of taking out a payday loan to pay off another.

In some cases, the cycle of debt has become so much, that a minority of students have turned to prostitution and other illegal activities to raise the money necessary to pay what they owe.

The Chaplain of the University, Rev Jude Drummond, recently said, “payday loans lead to desperate measures. We have got a lot of crime and social problems in this area, and a lot of people on the street because of money worries. I’ve seen evidence of people turning to sex work because they can’t make ends meet.”

This move to ban payday loans from the University of East London is sure to be watched closely by other universities around the country. Last year alone, it is estimated that thousands of students got into financial trouble due to payday loans, which means the problem is not unique to London.

In fact, it would not be surprising to see other universities follow suit in the coming months, and ban payday loan companies for good to protect their vulnerable students.

Many payday loan lenders have come under fire in recent years, as experts and government officials warn that they are “almost unlawful” and designed to target the vulnerable.

What is most worrying is the long-term repercussions of getting into trouble with payday loans, especially for students. The financial implications of getting into a lot of debt could haunt them for years to come, and make securing credit in the future almost impossible.

Ultimately, it’s probably safe to say that payday loans were not designed to be a good match for students, and they would be better advised to seek out a student loan to help with their finances.