Cyprus Capital Control Arbitrage Opportunities

Here’s Faisal Islam’s photo of capital controls in action at Cyprus’ main airport.

One way to calculate the value of the Cypriot Euro is to look at what it would cost you to get off the island and into the proper eurozone. Based on playing around with the EasyJet website, it looks like the cheapest escape is a Sunday flight to Milan that can be had for the low price of €76.24 leaving you in Italy with as bit over 900 proper euros. But of course since flights are going to come and go in practice anyway, one key question will be how rigorously do airport officials really enforce these controls? Will it be relatively simple for well-connected flight crew members to spirit money out of the country for themselves their friends and their family, or is Cyprus the kind of country with the strong culture of anti-corruption that can resist the temptations here? I don’t want to besmirch the good name of the Cypriot civil service, but I have the sense that if this was the kind of country that was capable of implementing these rules in a non-corrupt manner that it never would have become an offshore tax haven for Russians in the first place.