Levy on bank deposits would undermine trust in Cyprus - Russian lawmaker
MOSCOW. March 17 (Interfax) - The proposed levy on bank deposits in Cyprus to finance a bailout for that country would undermine trust in Cyprus and negatively impact Russia's interests, said Russian lawmaker and head of the Russian Regional Banks Association Anatoly Aksakov.
Cyprus' wellbeing rested on Russian capital at one time, so "trust in Cyprus as an appealing place in which to save capital would be undermined," Aksakov told Interfax.
Obviously, Europeans did not put money into Cypriot banks, so the bailout will be based on Cypriots' and Russians' bank accounts, he also said.
In experts' estimate, banks in Cyprus keep up to $20 billion in Russian capital, Aksakov said.
Concerning Russia's $2.5 billion in financial aid provided to Cyprus in 2011, Aksakov said "the decision was ill-conceived, if our companies have failed to withdrawn their capital now."
"The situation has highlighted again that the Russian economy must pull out from offshore zones where capital is not always legal, and that the G20, given its influence, "may close such zones."
Reports said earlier that international donors want to reduce their role in the economic recovery of Cyprus and they demanded that a 6.75% levy be imposed on all deposits under 100,000 euros and 9.9% over that amount. Cypriots and foreign nationals residing in Cyprus were shocked by the prospect.
The levy, promising to bring in 5.8 billion euros, will be collected from all residents of Cyprus, including Cypriot civil servants and Russian oligarchs who use Cyprus as a tax haven, La Libre Belgique writes,
The Cypriot parliament's emergency debates of the proposed bill, earlier set for Sunday, have been pushed back to Monday. The debates are due to begin at 4 p.m. locale time (6 p.m., Moscow time).