The current global financial crisis is the biggest economic upheaval for all libraries around the world and especially for those in Southern Europe. Due to this crisis, Greek and Cypriot libraries face many problems deriving mostly from their state funding and personnel reduction. The paper focuses on the effects on operation and services of Greek and Cypriot libraries, and the impact caused by salary reductions and personnel layoffs on their actual survival. A survey was conducted through an online questionnaire available in Lime Survey to all Greek and Cypriot academic, public and special libraries. Responses were gathered and analyzed. In conclusion, the paper proposes some ideas for the development of new services and activities that may help libraries to deal with the effects of financial crisis and help them stay alive and to reactivate their users support.