NEWS

Russia's Medvedev voices displeasure at Eurogroup agreement for Cyprus

Russia had a negative reaction on Monday to a European Union bailout of Cyprus that will result in heavy losses for foreign depositors at Cypriot banks.

"In my view, the stealing of what has already been stolen continues,» Prime Minister Dmitry Medvedev was quoted by news agencies as telling a meeting of government officials, according to Reuters.

Since last week’s initial decision to impose a tax on deposits in Cyprus, where about a third of savings are estimated to be Russian, Moscow has reacted negatively to any solution to the Cypriot crisis that would force losses on its citizens.

“We need to comprehend what the outcome of this situation will be and what consequences it will have for the international financial and monetary system but also for our interests,” said Medvedev, according to Agence France-Presse.

Alexander Nekrassov, a former Kremlin adviser, told the Guardian that if Russian depositors are affected by the bailout measures, Moscow might seek retribution.

"Then, of course, Moscow will be looking for ways to punish the EU,” he said. “There are a number of large German companies operating in Russia. You could possibly look at freezing assets or taxing assets. The Kremlin is adopting a wait and see policy."

Cypriot Finance Minister Michalis Sarris expressed hope that relations with Russia would not be damaged by the decision to impose heavy losses on large depositors at the island’s two largest banks, Popular Cyprus Bank (Laiki) and Bank of Cyprus.

"I think the Russians were understandably disappointed with this turn of events,” he told CNBC after the Eurogroup ended early Monday. They have had a long, successful and happy history and association and this has come partly as a shock despite the fact that many of these things had been rumoured."

Russia refused to provide Cyprus with any financial assistance last week but has indicated it would improve the terms of an existing 2.5-billion-euro loan to Nicosia.

“It's a mistake to think that it's a very special class of rich people [that have their money in Cyprus]. Russians have their lawyers, accountants or their families and friends in Cyprus, so our relationship can withstand a shock like this,» added Sarris.

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