Medvedev says Russia to study impact of Cyprus deal
Prime Minister Dmitry Medvedev said Monday that Moscow intended to study the consequences of the Cyprus bailout deal agreed in Brussels amid analyst warnings of Russian deposits suffering the biggest hit.
“We have to figure out what this story turns into in the long run, what the consequences for the international financial and monetary system will be — and thus, for our own interests as well,” news agencies quoted Medvedev as saying in Russia’s first official response to the rescue.
The 10-billion-euro package will see Russians who have some $31 billion parked in Cypriot corporate and private accounts lose cash from a so-called “haircut” placed on deposits of more than 100,000 euros in Cyprus’s biggest bank.
Moscow’s Alfa Bank investment house noted that “a bigger burden is to be placed on bigger, mostly Russian deposits under the deal.”
Russia reacted angrily to an original plan that was to have seen a 10-percent levy placed on deposits in Cyprus of more than 100,000 euros. That deal was dropped after being rejected by the Cypriot parliament.
European negotiators and Cypriot officials have still not worked out the final details that stipulate how painful the cut to the larger holdings in Cyprus’s biggest bank will be.