In a dramatic symbol of the Mediterranean fiscal crisis, the UK government has sent a plane loaded with €1 million in cash to Cyprus for use by British military personel on the island. The plane was still in flight, as of 12:10 p.m. ET, as the Cypriot parliament began debate on a bailout plan that would tax bank deposits.
The airlift of euros, worth £860,000 or $1.3 million, is intended to provide liquidity for members of the British armed forces, who, like everyone else in Cyprus, may not be able to access cash when banks there reopen on Thursday, March 21. ATMs in the country ran dry over the weekend after the tax on deposits was proposed, and banks have been closed since Friday, March 15.
The British government has also said it will cover “reasonable losses” incurred by British service personnel due to the tax. Cyprus is a member of the British Commonwealth.
Cash airlifts are rare but not unheard of. Greece was said to have secretly shipped in banknotes from abroad at the height of its debt crisis. The US administration in Iraq worked out that a Hercules C130 transport plane could carry up to $2.4 billion in $100 bills and flew a total of $12 billion to Iraq after the 2003 invasion. More than half of it went missing.