If you haven’t noticed – and it’s likely you have not, attention has now moved on elsewhere – the financial task for Cyprus is now quite a bit steeper than was the case at first (that’s from the FT, so in English; free, but registration required). We had been talking about the country being asked to contribute €7 billion to get a €10 billion bailout; now the tab has risen to €13 billion for that €10 billion bailout.
Among other things, this is going to mean an even BIGGER hit to those holding accounts in excess of the €100,000 threshold at the island’s two biggest banks. Yes, many of these are Russian nationals. So that now, as Die Zeit reports, the Cypriot government has come up with a scheme to at least offer an easier path to EU citizenship for high-net-worth individuals.
The Die Zeit piece (no byline) states right off that this measure is meant as outright compensation for confiscation – i.e. for the monetary losses these people are incurring as Cyprus tries to grab the money it needs. And indeed, it further reports that President Anastasiades first announced the measure in a presentation he made yesterday before a group of Russian businessmen in Limassol (Cyprus’ second-biggest city, so filled with Russians that many just call it “Limassolgrad”!).
But does this move make sense? How receptive were those Russian businessmen likely to have been? “OK, you’ll never be able to trust our banks ever again, but do stay anyway for the sake of the nice warm Mediterranean sea-breezes and
the souvlaki!” (more…)