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21 March 2013updated 22 Oct 2020 3:55pm

The Cyprus cash airdrop is just another military contingency plan

RAF air-lifted in one million Euros in cash.

By Berenice Baker

A drop in salary took on a whole new meaning for members of the British Armed Forces deployed in Cyprus, when the RAF air-lifted in a million Euros in cash.

The emergency measures were designed to ensure troops don’t run out of cash if cash machines empty, as banks are closed until Thursday in the aftermath of a controversial plan for a one-off levy on savings, which has since been rejected by the Cypriot government.

Is it usual for British service personnel deployed abroad to be paid in local currency, and does the Ministry of Defence (MoD) regularly have to deal with the dramatic local effects of an increasingly destabilised global economy?

An MoD spokesperson said that the way soldiers are paid is up to them. Generally, for European deployments to permanent bases such as in Cyprus or Germany, personnel choose to have the majority of their wages paid into their regular UK bank account, with some “spending money” paid into local accounts in Euros.

In the case of mid-term operating bases, a unique local micro economy can spring up. At Camp Bastion, the pound can be exchanged at a favourable rate with the local currency the afghani, and Bastion shops and food outlets deal seamlessly with Euros, US dollars and pounds.

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Locals are encouraged to set up shops and stalls in the camp to sell local craft mementoes and gifts, and are very keen to get their hands on dollars, the de facto universal currency. However, with the Danish military working closely with Afghanis to deliver training, the Euro is catching up in desirability.

For short-term operations like Libya with no in-country base, the MoD makes no local financial arrangements.

With the global economy struggling and the banking system of some countries teetering on the verge of collapse, does the MoD have a regular plan in place to ensure at least the military economy continues to thrive?

“Not really,” says the MoD spokesperson. “It’s the job of the MoD to react to a rapid change in any situation with a contingency plan, and the potential shortage of cash in Cyprus is just another example.”

This blog first appeared here.