independent

Sunday 20 April 2014

Irish property speculators fear for cash in Cypriot account

A GROUP of up to 30 Irish property speculators have been left sweating on their investments due to the Cypriot bailout crisis.

The group, mainly Irish nationals living in the Middle East, all invested in a fund to take advantage of the collapse in property prices back home in Ireland.

Under the scheme, each invested €20,000 or more with a property consultancy, which has been seeking to snap up cut-price Irish properties whose value is likely to increase in the coming years.

A further 20 British nationals are also thought to be involved in the scheme.

Investor funds were placed in a Cypriot client account.

However, the account cannot currently be accessed after banks on the Mediterranean island closed their doors last weekend.

And tens of thousands of euro could be wiped off the value of the fund should the Cypriot government cave in to pressure from the EU and IMF for a levy on bank deposits as part of a bailout deal.

Richard Jones (37), a project finance consultant from Ballyhaunis, Co Mayo, who is involved in the scheme, flew in to Cyprus earlier this week in an attempt to withdraw the cash before any proposed levy on the account.

"I came over yesterday because the banks were due to reopen, but they didn't," he told the Irish Independent.

"I found it hard to get into a hotel room here. Everything has been booked up by the Russians coming in to withdraw their cash. That just confirmed my decision to come out as there will be an almighty run on the banks once they reopen."

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He said the clients' funds were held in a Cyprus bank because the country "has been seen as a gateway for investment from the Middle East into Europe".

"Most of my investors are very small -- around €20,000. But it is a lot of money to them. They are mostly Irish and British expats living in the Middle East and they see value to be had in Irish property now," he said.

Mr Jones said he believed the current crisis signals the "beginning of the end for the euro".

He added: "I think what the EU has signalled is that bank deposits are no longer safe. At a single stroke they have reduced the European banking system to third-world status."

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