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Michael Delyagin: Having Got Frightened of Cooperation of Cyprus with Russia, the Europeans Shifted the Weight of the Crisis on Rather Poor Cyprians

Michael Delyagin: Having Got Frightened of Cooperation of Cyprus with Russia, the Europeans Shifted the Weight of the Crisis on Rather Poor Cyprians
23.03.2013

Source: Mir Novostey

- How this situation – if Cyprus will make the decision on taxation of bank deposits – will influence Europe and Russia?

- Bank deposits in Cyprus exceed 70 billion euro, 30 from them – foreign, including 19 billion euro – Russian ones: 9,1 belong to physical persons, the rest – to legal persons. Considering the fact that many of our assets work under the banners of the third countries (there’s no clear boundary between economies of Russia and Ukraine, Russia and Kazakhstan), the Russian deposits a little exceed 20 billion euro. At the scheme rejected by the Cyprian parliament losses would make about 2 billion euro; at progressive taxation they could be slightly higher (it was reported about the Russians having 100 million euros).

The Russian banks accredited the Cyprian legal persons (including affiliated with them) for the sum of 40 bln. dollars. Crash of the Cyprian economy after disinvestment will make considerable part of these credits hopeless.

More than 150 billion euro against not used remains of means on the accounts of the federal budget of Russia – 6 trillion rub – unpleasant, but not considerable losses.

While Cyprus for Europe is "periphery of the periphery" and its destiny won't affect either Eurozone, or the European Union in the least.

- How could be explained Putin's nervous reaction – he cursed that decision? After all once he criticized "offshore companies of Yukos". While now he seems to worry about it.

- Well, after all "offshore companies" of not destroyed "Yukos" suffer there. Companies of those whom Putin obviously consider not enemies, but friends.

Russia is ruled, according to the brilliant self-name, by "offshore aristocracy". On the whole, as we are showed by "enraged printers", these are people without honor and conscience, it’s ridiculous to expect normal human reaction or at least following own chants from them.

I think that intensity of public hysterics of the Russian figures very well corresponds to the size of their personal riches which got under blow in Cyprus.

- Merkel, criticizing decision of the Cyprian parliament, declared that the German taxpayer won't rescue the Russian deposits, say, if we refused to play by their rules, we should get out as we want. While our authorities, apparently, aren't so scrupulous and for certain will rush to rescue their deposits and oligarchs at the expense of budget money which Cyprus, certainly, won't return. In any case, there are big suspicions that it will be so. The Minister of Finance of Cyprus is in Moscow, probably, he settles with matter. What do you think, if Moscow will give Cyprus money or not? How it is possible to estimate such decision (which, probably, will be made one of these days, we will follow this situation during this week)?

- Everything depends on the character of the agreement. Merkel's panic statement about inadmissibility of contacts between Cyprus and Russia showed that the Germans bethought and understood: if the European Union lays down conditions unacceptable for Cyprus, it can pass to a mode of integration with Russia. Then our country will return to the Mediterranean and, probably, situation will be even more serious, than in the Soviet period, for the European Union which still recollects "republic of Seven Islands" it is absolutely unacceptable.

Having got frightened of cooperation of Cyprus with Russia, the Europeans suggested to refinance its old credit of 2,5 billion euro and to give Cyprus 8.7 billion through European Central Bank - on condition of introduction of emergency tax for the Cyprian citizens equal to 3,7 billion euro. In this case foreign investors are exempted from encumbrances which weight falls on rather poor without it Cypriots.

Though, I think, it’s also intermediate option.

- Great Britain got oriented in the situation better, than the Russian Federation: a plane of the Royal Air Force of Great Britain with one million euros cash onboard is already on the way to Cyprus. If ATMs and their debit cards cease to work, military personnel will be able to borrow money and the Ministry of Defence of Britain now contacts military to learn, whether they want their salary for March and for the next months to be transferred into the British accounts, instead of the Cyprian ones. If we had some similar idea? Or we can only propose to preserve deposits at the expense of taxpayers?

- These are essentially different situations. English military didn't run to Cyprus from the English laws and are there in general against their will: they were sent there by Great Britain – clearly that it is obliged to provide them with all that is necessary, from toilet paper to cash. They are on service.

While the Russian citizens in Cyprus – physical persons. Certainly, it would be quite good if our embassy gets engaged in ensuring of their interests, would adjust crediting by cash for the time of "freeze" of banking system, but let's remain realists and won't demand impossible: in a number of countries the Russian diplomats as far as I can judge refuse to help the Russian citizens even in critical situations, embassies cause in many people horror and rejection.

- Zhirinovsky came to the State Duma in a black suit, having declared that it is mourning "for the Eurozone, the European Union, private property". What do you think, if it is time for all of us to put on mourning clothes? If Cyprus taxes deposits in banks, what the Russian citizens should expect?

- Normal person in any case shouldn't be like Zhirinovsky.

About cries of oligarchs about "end of private property" - I will remind that Iceland in general refused to execute its guarantees on bank deposits of foreigners and the world didn't crash, Iceland feels itself good.

Thus Cyprus already made itself financial hara-kiri, but it won't have global consequences.

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