TALA — Cathi Delaney chooses a shady spot on the terrace to sip a refreshing cup of iced coffee. It's October, but with temperatures well above 30°C (86°F), the nearly 60-year-old British woman is perfectly comfortable wearing just a floral dress. This, after all, is what brought her to Cyprus: the sun, the sea, the sweet life.

But in recent months, back in her country of origin, a majority of voters opted for Brexit, that will force the UK to leave the European Union — adding a major element of anxiety to her otherwise trouble-free existence. "Brexit raises a lot of uncertainties," she says, noting the various legal and bureaucratic issues. "Will I get my state pension in six years? Will my husband benefit from the General Hospital Scheme that gives affordable access to health care?"

Delaney is one of an estimated 80,000 subjects of Her Majesty the Queen currently residing in Cyprus, an EU member for the past 12 years. Together they represent about 10% of the small republic's population. Around half of these ex-pats are retired. The rest work in finance, tourism or in the military. Cyprus has two British bases.

A former insurance agent, she retired early with her husband, at 45, to move here to this house they had built in the village of Tala, where half of the population is foreign. That was 14 years ago. "We'd fallen in love with this quiet, cool place in the hills, 10 minutes from the Coral Bay beach," she says.

The couple has lived on their savings. But like many Brits, they now fear they might need private insurance to cover their health care costs. Delaney, who serves as a town councilor (as allowed under EU rules), also worries about the impact Brexit may have on local commerce.

"If the British lose purchasing power, they'll consume less," she says. "The typical ex-pat goes out to a restaurant once or twice a week. If they were forced to leave, the consequences would be catastrophic for businesses and real estate."

The equation is simple: pensioners who are paid in pound sterling have lost 15% of their purchasing power since June 22.

A toll on tourism

Ex-pats aren't the only ones concerned over Brexit. For the 12,000 Cypriots who are studying in the UK, it could mean losing the European rate and having to pay tuition fees of 20,000 pounds ($30,000) per year instead of 9,000. There's are also government grants and subsidized loans specific to EU citizens that could disappear. Many hope that Cyprus' status as a member of the Commonwealth will guarantee them a better deal than other EU students, but nobody knows for sure.

With regards to the economy, the big concern is tourism, which represent more than a quarter of Cyprus' GDP, according to Angelos Loizou of the Cyprus Tourism Organization. True, more and more Russians are visiting the island, which includes several Orthodox Christian destinations. But of the record-high three million foreign visitors expected this year, 40% of them are likely to be British.

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Cyprus bankscape — Photo: Leonid Mamchenkov

For the 2016 summer season, most British tourists had booked before the referendum, meaning it's too early to assess a "Brexit effect." But in the long run, the sector risks paying a hefty price for a strategy that focused too much on the downmarket and all inclusive holidays. "The British only come here to get drunk," laments a senior official.

To remedy the situation and prevent potential Brexit-related effects, Angelos Loizou hopes to bring back the upmarket clientele that used to visit the island in the 1980s. But the Tourism Board chairman doesn't control all levers. "If Ryanair or easyJet are impacted by the Brexit, then so are we."

Seeking silver linings

On a diplomatic level, the exit from the EU of the ancient colonial power means, for Cyprus, losing an important ally inside the European institutions. "We shared the same views in Brussels on trade, market liberalization, taxation," says a British diplomat who already talks in the past tense.

Are there any positive elements to this otherwise gloomy picture? Perhaps. Deputy Minister to the President Constantinos Petrides believes there may be opportunities in the finance sector. John Patrick Hourican, an Irishman who heads the Bank of Cyprus, agrees. "The current uncertainty around the "divorce" could provide us with an opportunity," he says.

Marios Tannousis, deputy chairman of the Cyprus Investment Promotion Agency, notes that since the referendum, several meetings have taken place to promote the island as a potential landing point for financial organizations. Another conference will take place next month in London.

All things considered, Harris Georgiades, the young finance minister who's been successful over the past three years in pulling his country out of the banking crisis, minimizes the impact of Brexit. "I'm not worried about our economy," he says. "Still, I'm very disappointed by the result of the British vote and very concerned by the direction the European Union has taken."