A Russian depositor holds a tablet computer showing a picture of Vladimir Putin during a protest in Nicosia, Cyprus. Photograph: Katia Christodoulou/EPA
They clustered in small groups on the plush couches dotted around the lounge of the Four Seasons hotel in the port city of Limassol. Nervous whispers and furtive glances revealed these were no ordinary tourists revelling in the sun on the Mediterranean island of Cyprus.
They were Russians, who have been flocking to the city for urgent meetings with lawyers and financial advisers, fearing for their personal finances, with sums at stake ranging from the low thousands to hundreds of millions of euros and totalling more than $32bn (£27bn).
"Everyone has flown in hoping to use contacts with locals to pressure the leadership, the deputies," says a man who identifies himself only as Vladimir. "We are all very worried, very scared."
The 45-year-old businessman refreshes his iPad incessantly, seeking news from the parliament in the capital, Nicosia. If the country's banks go bust, he stands to lose €58m. Where the money came from, he declines to say.
A large sliver of Russians has grown amazingly wealthy since the Soviet collapse, buoyed by the oil boom at the turn of the century. How the money was obtained in a country plundered by corruption is often anybody's guess.
Well fed on graft at home, most wealthy Russians choose to keep their money abroad, safe from prying rivals and over-zealous government officials seeking a piece of the pie. Cyprus has become their offshore haven of choice.
The EU plan, pushed strongly by Germany, to raise €5.8bn towards the bailout via a levy on accounts was widely seen here as a means of forcing Russians to pay for the luxury of keeping their ill-gotten gains safely inside the EU.
Vedomosti, Russia's leading financial newspaper, saw the charge going to the very top, citing President Vladimir Putin in all but name in an editorial published on Friday: "It's hard to believe, but it seems that European politicians are ready to take big risks to put pressure on a certain influential politician, who secretly harbours money in Cypriot banks."
Michael Sarris, the Cypriot finance minister, left Moscow on Friday after three days of negotiations failed to result in any Kremlin aid.
On the Mediterranean island, there are fears that the loss in confidence will prompt wealthy Russians to withdraw their cash en masse once transactions are allowed. Vladimir, the businessman, plays down those fears: "To take out a big sum and place it elsewhere – people will ask questions about where it came from. Everyone knows there's plenty of money here that smells bad."
Behind the billions lies a solidly entrenched Russian community of about 50,000. Their base is Limassol, a sprawling city that lines the coast and stretches into inland foothills.
Signs of financial crisis abound – tattered posters reading "for rent" hang on half-finished buildings. Many shops are closed. Cafes and restaurants, once bustling, sit largely empty.
"It's been like this for a while, but has got worse in the past few days," says Lara Avakian, 29, a physiotherapist working in a beauty salon. "Everyone is waiting to see what will happen." And everyone has begun to think of the long-term consequences of a crisis that has struck at the very heart of Cyprus's economy: "If the Russians take their money, we're doomed."
A sign outside Larnaca airport greets visitors with "welcome to Cyprus" in Russian. Russian-language billboards for Visa cards, luxury properties and Moscow-based banks line the road to Limassol, the country's second largest city. Petrol stations belonging to LUKoil, Russia's biggest private oil company, dot the roads.
The city's main stretch of seaside road boasts Russian groceries, their shelves packed with jars of pickles, vodka and Sovetskoye Shampanskoye, a super-sweet take on champagne. There are Russian-language bookshops and schools, and two Russian-language newspapers and radio stations, and Orthodox churches catering to the country's Russian community.
At Rus Market, Russian émigrés load up on sunflower seeds, Soviet-era chocolate brands and veniki, bound birch tree branches that Russians use in the bathhouse in order to beat the body's circulation into high activity. Videos by Russian pop stars blare from its television sets.
"We've lived here a long time, so we're taking it like Cypriots," says Olga, the co-owner of Afrodite Furs, one of four shops selling row upon row of fur coats in a city that lives in a near perpetual state of summer. "This is my second motherland."
She moved to Limassol after visiting Cyprus on holiday 12 years ago and meeting the man who would become her husband. "
"I'm ashamed of Russia, they've just dropped us," she says. "They've all lived in Cyprus; they've fed on its low taxes and high interest rates. If you've already swarmed in here, you should lend a helping hand – all the more since we are both Orthodox, we have the same faith."
Since the crisis broke, Russian oligarchs have been coming out to declare they hold no funds in Cyprus.
Mikhail Prokhorov, a metals magnate, bank owner and politician, insists his holdings are zero. Alexander Lebedev, owner of the Independent and Evening Standard, says his holdings on the island are negligible. Yet the bulk of Russian oligarchs – from Chelsea FC owner Roman Abramovich to Arsenal FC owner Alisher Usmanov – are believed to control their firms via Cyprus-registered vehicles.
Many Russians have also invested heavily in real estate on Cyprus, buying luxury properties around the island. But many of the year-round Russian residents are not wealthy and have spent several days queuing up alongside Cypriots at bank machines in a desperate attempt to withdraw cash in the event of a bank collapse.
Alexandra Zimakova, 38, a small business owner originally from St Petersburg, has just under €100,000 in Laiki Bank, the country's second largest and most troubled. "I already lived through one default, in Russia," she says, referring to the 1998 crisis when Russia defaulted on its debt, devastating its economy. "Now we have to see what will happen next. So far it's terrible panic, people talking about horrible things, rumours everywhere, very little real information."
Cyprus was meant to be different. In Russia, successful businesses are regularly raided by corrupt government inspectors and then stolen by well-funded rivals. Banks are still seen as insecure; many keep their savings at home.
Eight years ago, Zimakova bought a house outside Nicosia for €150,000. She does not know how much it is worth today, with real estate prices steadily dropping. In the past few days, neighbours have reported three robberies as people begin to store more cash at home.
"We don't know what will happen," she says, echoing the sentiments of everyone across the island, be they Russian or Cypriot.
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