The one-time tax on bank deposits specified in Cyprus bailout agreed with the EU and IMF will strongly affect Russian citizens’ bank deposits amounting to at least $20 billion, according to estimates by experts. “The trust in Cyprus, as a safe place to deporit the money will be reduced to zero,” said Anatoly Aksakov, MP and president of the Association of Russian Regional Banks, quoted by Interfax. Aksakov cited estimates of experts, who said the Russian deposits in Cyprus would amount to $20 billion (€15.4 billion), according to the news agency.
The Russian edition of the U.S. magazine Forbes cites on its website much higher estimates of the level of these deposits. Moody’s has estimated at $19 billion (€14.6 billion) the funds placed in Cyprus by Russian companies, as of September 1, 2012. There is also money from Russian banks placed into financial institutions in Cyprus of $12 billion (€9.2 billion), according to the same source. Forbes also cites media estimates of up to €35 billion in deposits of Russian individuals in Cyprus.
The Russians lost in one day up to €3.5 billion, according to Forbes that also mentions that the tax of 10% on deposits in Cypriot banks created panic among the richest Russian businessmen.
At dawn on Saturday, the Cypriot government agreed with eurozone and IMF on a safeguard plan of up to €10 billion in exchange for an one-time tax of 6.75% on all deposits under €100,000 and 9,9% for deposits above €100,000. The Vice President of Russian Regional Banks Association, Alexander Khandrouiev suggested that Russia should negotiate with Cyprus a relaxation or exemption from tax in exchange for additional financial aid, according to Interfax.
Cypriot Finance Minister Michalis Sarris is expected in Moscow next week, according to sources quoted by Ria Novosti agency, which announced his arrival Monday, then Wednesday. Information could not be confirmed at the Russian Ministry of Finance.
President of Cyprus, Nicos Anastasiades estimated that he chose “the least painful option” agreeing to introduce a tax on bank deposits outstanding on Sunday evening in a speech televised address to the nation. “We chose the least painful option, I assume the price the political, in order to minimize the consequences for the economy and for our fellow Cypriots, “said the President, on the eve of a parliamentary debate on the bailout plan negotiated with the European Union and the end of which should be approved text that provides a tax all bank deposits in exchange for a loan of 10 billion euros.
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