Searching for the One to Blame for Cyprus

Searching for the One to Blame for Cyprus

By Ivan Preobrazhenskij

Who has invented the tax on Cyprus bank accounts, which the Parliament of the island country doesn’t want to approve? The European Central Bank is trying to lay the blame on the President of Cyprus, and he, in his turn, blames the governments of the Eurozone countries. Meanwhile the issue, as well as the accounts in Cyprus banks have hung up for indefinite period, as they have not yet been able to “break” the MPs. Moscow also tries to take part in the resolution of this problem, which was appointed beyond its will as a “title sponsor” of Cyprus stabilization.


Russia hasn’t managed to agree with Cyprus about the terms of crediting of the island country, which would allow the Cypriots to refuse of the aid of its EU neighbors. At the same time, Cyprus Parliament didn’t wish to support the governmental bill, introducing a new tax on bank accounts, which was the main condition of European states, ready to Credit Cyprus for the island to be able to avoid bankruptcy.


Thus, the situation is becoming acute and the probability of announcement by Cyprus of a sovereign default, i.e. refusal of payment for foreign states of any debts, increases evidently. And in this case, Russians can lose even 2-3 billion Euro, as now the experts assume, and those several dozens of billion Euro, which according to the estimations of the former Vice Chairman of the Central Bank Gennadij Malikyan, Russian corporations, small and medium business keep in Cyprus banks. And this is yet not all – at the balances of many Cyprus companies shall hang up the control stocks of the biggest Russian companies, among which there are also corporations with state share.


In this case, damage for Russia shall comprise not a few billions, and even not dozens, but hundreds of billions Euro. It’s not a surprise that at the background of this news Russian stock market has started shaking. Only two things yet retain it from collapse – low awareness of investors of which exactly assets are at the balances of Cyprus companies, owned by Russians, as well as general unclearness of the situation and absence of final decision of Cyprus authorities, which strive to keep on consultations with Russia as well as with the EU partners.


As this clearness occurs, financial markets shall jump up a bit with positive news, which in the established situation, can be even official introduction of the bank accounts tax, or collapse in case of announcement by Cyprus of a sovereign default.


The way Russian authorities shall act in case of the negative scenario development, is quite difficult to predict. Europeans in practice stroke, purposefully or accidently, in the very painful spot of modern Russian economy, and the threat of acute destabilization is quite significant. However, there is no other mean, except for to agree with Cypriots and make them more interesting suggestions, than ultimatum, exposed by Germany and the countries of the Eurozone supporting it. By this not “being stubborn”, trying to demonstrate its principal line or striving to open details on individual accounts, as it was earlier requested by Russians, attempting to get in the essence, access to confidential information not only about some Russians, but also about Ukrainians and, for example, politicians and businessmen of Kazakhstan.


The only ones who can be calm already now are small entrepreneurs and individuals from Russia – they have already lost a part of their money and in comparison with the corporations, no one shall redeem their losses. The case is not about thousands and even millions – they are fighting for Cyprian billions.



Translated by EuroDialogueXXI from








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