Crisis in Cyprus

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    "Matthew Rojansky"
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In The Media

Crisis in Cyprus

Despite Cyprus' favorable fiscal and legal enviroment and the fact that Russian state is one of Cyprus' main creditors, Russia's involvement has generated some surprises.

By Matthew Rojansky

Published on Mar 20, 2013

Source: CNN International

Russia’s deep ties to Cyprus have made the country react quickly to unprecedented EU bailout conditions, involving a simple levy on all deposits. Carnegie’s Matthew Rojansky spoke to CNN International about the relationship between the two countries and the consequences of this still unconfirmed policy.

Rojansky characterized the relationship between the two countries as a ‘two-way street’ with lanes of different widths. The size of Russian corporate deposits in Cyprus is comparable to the country’s GDP. Many Russian investors have registered companies on the island to benefit from its favorable fiscal and legal climate. Russia has also become Cyprus’ main creditor over recent years and has offered to grant Cyprus more favorable payback terms, Rojansky added.

To explain rumors concerning a possible geopolitical subtext, Rojansky pointed to the fact that, while investors may not be happy to see 10 to 15 percent of their deposits being withdrawn, this comes at a time when President Putin is trying to convince important civil servants and businessmen to repatriate their funds. Rojansky also noted that such a dramatic step would not have been taken were it not for the EU’s main contributor, Germany, disapproving of Cyprus’ lax attitude to Russian money-laundering.

About the Author

Matthew Rojansky

Former Deputy Director, Russia and Eurasia Program

Rojansky, formerly executive director of the Partnership for a Secure America, is an expert on U.S. and Russian national security and nuclear-weapon policies.

Recent Work

Paper
An Opportunity for Ambition: Ukraine’s OSCE Chairmanship
- Matthew Rojansky
In The Media
Presiding Over the OSCE: Challenges and Opportunities
- Matthew Rojansky

Economy Russia Western Europe

Carnegie India does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

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