Cyprus to console big losers in bailout with EU passports

AFP, LIMASSOL, Cyprus

Tue, Apr 16, 2013 - Page 7

Cypriot President Nicos Anastasiades on Sunday said that foreigners with bank deposits in Cyprus who lost at least 3 million euros (US$3.9 million) under an EU bailout for the island would be given passports.

“Non-resident investors who held deposits prior” to the bailout and lost “at least 3 million euros will be eligible to apply for Cypriot citizenship,” which brings an EU passport, Anastasiades said.

“We believe that a number of measures to be adopted could on the one hand mitigate to some extent the damage the Russian business community has endured,” he told a Russian business conference in second city, Limassol.

He said the measures, primarily affecting Russians, would be approved at a two-day Cabinet meeting that was to start yesterday.

“These decisions will be deployed in a fast-track manner and other measures currently under consideration,” said the president, whose country sealed an EU bailout last month to rescue it from bankruptcy.

Most of the money being raised by Cyprus to qualify for the bailout is to come from a hit of as much as 60 percent on more on deposits above 100,000 euros at the country’s two largest banks.

Russians have billions of euros parked in Cyprus, with estimates ranging from 5 billion to 31 billion euros. Moscow was angered that they would lose part of their money under “haircuts” demanded in return for the bailout.

“I wholly acknowledge and share their understandable bitterness and apprehension caused by the coercive manner with which the Eurogroup agreement was imposed on my government,” Anastasiades said of the Russian business community.

Russians at the conference acknowledged the obvious advantages of an EU passport, but some were unconvinced.

“But a passport doesn’t solve the problem of businesses which fear a repeat [of a haircut on bank deposits] and it’s now difficult to operate in Cyprus,” Russin entrepreneur Vasily Novikov said.