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Results confiscatory reforms Merkel in Cyprus has upset the USA: the influence of Russian capital has only intensified
Material posted: Publication date: 24-08-2013

More recently, the global media give opposite evaluations of the status of Russian assets in Cyprus after confiscatory reforms carried out there at the request of the EU for the normalization of the financial condition of the banking sector of the island state and receiving financial aid. August 16, 2013 IA Reuters gave the publication "the Capital of the Russian Federation have preferred to Cyprus British asylum", where it was confirmed that the Russian offshore capital has found a new home, moving from the problem of Cyprus to the British jurisdiction. Russian Cyprus is no longer interesting.

However, on August 21, 2013 New York Times, in turn, published an article in which it was alleged that the Russian capital as a result of the banking turmoil in Cyprus took control of the world's leading reformed Bank of Cyprus - Bank of Cyprus. Consequently, the position of Russian capital in Cyprus as a result confiscatory reforms has been strengthened. On the one hand, the obvious contradiction between the two publications indicates the rhetorical excesses of the estimates and the apparent politicization of the issue, and on the other, the complexity of the ongoing process. In light of recent publications clearly becomes clear that the topic of Russian money in Cypriot offshore West initially interested in the political side of things.

According to Reuters, Cyprus lost to Russia's offshore value. The movement of Russian capital in the spring of this year, i.e. at the beginning of the reform, was reduced eight times compared with the same period of the previous year and the first quarter of 2013 totaled $2.7 billion From the liquidation of the Cyprus offshore in the first place, won Luxembourg and the United Kingdom. In the British virgin Islands for the first quarter of the current year totaled $31.7 billion Russian "investments" - in 15 times more than in the first quarter of 2012, and the UK $11.2 billion, compared with $0,26 billion a year earlier, the Luxembourg - $14 billion, compared with $258 million in the first quarter of last year. We can conclude that the confiscatory reform undermined the position of the Russian capital offshore in Cyprus.

However, in the New York Times article under the pretentious title of "Bank of Cyprus reports its ownership to Russian plutocrats" stated otherwise. Most significant, says the New York Times that, despite "received bruises", Moscow is now able to achieve in Cyprus, which has not been revealed before by any Russian oligarch ambitious - to gain control over one of the system of financial institutions of the European Union, which implies a leading commercial Bank of the Turkish Cypriot Bank of Cyprus. To confirm the truth of what happened New York Times quoted the President of Cyprus Nikos Anastasiadis from one of the June interview: "They [i.e. the Brussels and Berlin] wanted to throw out the Russians, but, in the end, they gave our main Bank to the Russians". Thus, it appears that the head of the Cypriot state in the month of July understand what happened.

Recall that the condition for assistance the Troika - i.e. the European Commission, the European Central Bank, International monetary Fund, the Parliament of Cyprus decided to confiscate Bank deposits held in the banks of Cyprus and the amount exceeding the limit of €100 thousand on a single Deposit. For the official policy of the European Union in this case was adopted by the thesis for the mistakes of the crisis banks in the Eurozone must themselves pay the depositors of these banks, and not taxpayers, as it was before, in particular, in the case of Ireland in 2010. In the case of Cyprus excuse this kind of practice was the assertion that the Russian deposits are composed of unjustly amassed and smuggled out of Russia capital. However, instead of "punishment by Russian plutocrats," claims the New York Times, it turned out that these "plutocrats" were able to further establish itself in Europe's financial system via receiving, at least on paper, of a controlling stake in Bank of Cyprus - the oldest, largest and most important financial institutions of the island state. Meanwhile, knowledgeable Cypriots believe that "whoever controls the Bank of Cyprus controls the island". How did this happen?

The fact that as a result of the elimination of another major Bank in Cyprus - Laiki Bank merged with Bank of Cyprus and move-in deposits, 60% of the capital of the latter now belong to Russian depositors. It turned out that a merger of two major banks in Cyprus, the share of deposits in the Russian capital of Bank of Cyprus increased. In the publication New York Times claimed that a third of these 60% is Russian money came from Laiki.

Despite his precarious condition, the Americans say, Bank of Cyprus continued to occupy influential positions in the political and economic interests of the country. In particular, the Bank can influence the energy policy of Cyprus, which has, as recently discovered, vast reserves of natural gas on the coastal shelf of the island.

It is known that on 19 June 2013, after two and a half months after the decision on the package of financial assistance to Cyprus and after listing in may of the first tranche of the loan, the President of Cyprus Nicos Anastasiades has demanded revision of the €10 billion aid package. The President of Cyprus in a letter to EU leaders and the European Central Bank pleaded for help to keep afloat Bank of Cyprus, which he described as a "mega-systemic Bank", his fall is able to collapse the entire economy of Cyprus. EU leaders were "taken aback". A letter from the President of Cyprus was considered at a meeting of the Eurogroup Council of Eurozone Finance Ministers. It was decided to leave it without consequences, since before the September elections in Germany, the issue cannot be resolved. Moreover, at the present time the situation in Cyprus is obscured larger issue - the need to provide additional financial assistance to Greece. In these circumstances, the Cyprus government announced that it would sell the license to the casino and will build gas storage in an attempt to give a boost to the island's economy crisis. However, Cyprus is trying to keep offshore. Corporate tax on the island was increased slightly to the level of 12.5%.

Now on their accounts the Bank of Cyprus is about half of all Bank deposits of the island. It employs 5700 employees, and he is ahead of all its competitors network of offices on the island, which is now attached to the branches of the former Laiki Bank. At least Laiki signage replaced with new ones.

New York Times claims that the Russian authorities, though feel rage because of the lost of billions, outwardly remain calm as "still see Cyprus as their prize." Acquired positions in the financial sector of Cyprus a great opportunity for Russia, both in local economic and political spheres. In particular, it appears that Russia is seeking access to its military aircraft at the military air base at Paphos, Cyprus. Russia is also interested in stationing its warships in the harbours of Cyprus.

Note that the idea of merging the banks in Cyprus crisis with simultaneous partial confiscation of deposits originally belonged to the Troika. At the practical level, it was promoted by Germany. Now, apparently, Americans believe that the aforesaid embodiment was originally erroneous. It would have been better if the Troika had followed the example of Ireland, the crisis banks which have received national guarantee for restructuring, i.e. the taxpayers of those countries paid for their ineptitude.

After the reform in late March 2013, the holders of deposits in Bank of Cyprus has initially lost access to 90% of their deposits, but in return they were promised shares in the Bank holding given that the specific percentage of confiscation has not been named. 29 July 2013 the Central Bank of Cyprus announced the final terms, under which 47.5 per cent equity in Bank of Cyprus major holders turned into share capital, which will own the affected depositors. According to the original plan it was only about 37.5% of the amount of the forfeiture. However, we note that the final amount confiscatory tax was lower than previously thought financiers, prognozirovanie that for the salvation of Cyprus with deposits will have to write off 60%. Yet none of the affected depositors have not got their certificates, but it is clear that 60% of the capital of Bank of Cyprus goes to them. In the media of Cyprus States that the proportion of 53% of the capital of Bank of Cyprus belongs to Russian citizens or firms representing their interests.

Such a result is absolutely contrary from what he achieved European leaders, particularly German Chancellor Angela Merkel, when they put confiscatory reform of secured financial assistance of the "Troika" Cyprus. Such a result is quite strange in light of the fact that "the Russian danger" in Bank deposits in Cyprus first saw the German intelligence service BND. The question is why the highly professional German intelligence service initially failed to calculate the consequences of a merger with Laiki Bank of Cyprus?

The press service of the European Commission in Brussels recently refused to comment on the prospect of the Russians control over a major commercial Bank in Cyprus. The Central Bank of Cyprus also could not "speculate" as expressed in his leadership on the future of the management of Russian Bank. However, the new shareholders meeting of this institution was appointed on 9 September 2013. Still not clear who they are personally as confiscatory reform significantly mixed financial Affairs, causing a partial escape from the island capital. It is known that before the crisis the Russian oligarch Dmitry Rybolovlev ("Uralkali") ownership interest in 10% of the shares of Bank of Cyprus. New York Times believes that he will continue to lead among Russians own the Bank of Cyprus.

Theoretically, now Bank of Cyprus is owned by its new shareholders, primarily from Russia. But in fact, the Bank is still under the control of the Central Bank of Cyprus, whose head panicos Demetriadis was appointed under former President of Cyprus, the Communist Dimitris Christofias. It is still unclear, if there is a recovery of Bank of Cyprus, or whether it is a "Bank-Ghost". Condition limit withdrawals from accounts in €300 per day remain in effect. Cypriots unclear and a possible strategy of the new owners of Bank of Cyprus. They ask the question: are the Russians are going to make an updated Bank viable? However, Cypriots believe that "they [i.e. the Russians] have no choice but to stay." The head of the Association of investors in Cyprus - local main lobbying group Michael Olympios sees no serious risks to Russian controlled Bank of Cyprus. "We're more in a state of cold war," he says.

A meeting of the holders of Bank of Cyprus in time to coincide with the planned publication of the Ministry of Finance of Cyprus plan to return to the free movement of capital in the Cypriot banks. However, the crisis experience shows that in the current situation it is very difficult to give up control measures. In particular, Iceland after the collapse of their banks in late 2008 is still not restored at the free movement of capital. The question arises, will the Russians - the new owners of Bank of Cyprus to operate them in crisis conditions, or they will prefer to take half their deposits and leave the island for another offshore. Problem is the question how the Russian state can rely on them in their political and economic objectives in the Eastern Mediterranean.

Note that this year marked a surge of Chinese business activity in Cyprus. Recently edition of the Greek Cypriot Cyprus Mail reported a sharp increase in the number of Chinese citizens who have submitted applications for residency in Cyprus. In addition, it became known that based on the Hong Kong Chinese company China Glory National Investment announced plans to invest €290 million in a Golf resort in Cyprus.


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