Poverty in Cyprus has surged by 28.2% since 2008 making it the second biggest climb in Europe after Greece, according to a study by the Cologne Institute for Economic Research (IW).
The study showed that the Mediterranean countries were the hardest hit, with Spain recording a poverty level rise by 18% and Italy by 11%. Poverty in Greece has increased by a shocking 40% from 2008 to 2015, according to data released by the Cologne Institute for Economic Research (IW).
Cyprus with a 28.2% rise comes after Greece, followed by Ireland with a 28% increase.
The study did not limit its criteria to the lowest income index, but included factors such as the inability to acquire material goods, as well as a decrease in education opportunities, underemployment and worse healthcare provisions.
The high poverty level is attributed to a prolonged recession, high unemployment, as well as tough austerity measures and the conditions and terms imposed on Cyprus and Greece by international creditors.
The 2013 Cypriot financial crisis, part of the wider European debt crisis, has dominated the country’s economic affairs in recent times.
In March 2013, the Cypriot government reached an agreement with its eurozone partners to split the country’s second biggest bank, the Cyprus Popular Bank (also known as Laiki Bank), into a “bad” bank which would be wound down over time and a “good” bank which would be absorbed by the larger Bank of Cyprus.
In return for a €10 billion bailout from the European Commission, the European Central Bank and the International Monetary Fund, the Cypriot government would be required to impose a significant haircut on uninsured deposits.
Insured deposits of €100,000 or less would not be affected.
After a three-and-a-half-year recession, Cyprus returned to growth in the first quarter of 2015.
Cyprus successfully concluded its three-year financial assistance programme at the end of March 2016, having borrowed a total of €6.3 billion from the European Stability Mechanism and €1 billion from the IMF.
The remaining €2.7 billion of the ESM bailout was never dispensed, due to the Cypriot government’s better than expected finances over the course of the programme.