News Column

Cyprus Bailout Good for Russia, Medvedev Says

April 17, 2013

Moscow (dpa) - The European Union's much-criticised handling of the debt crisis in Cyprus was a boon for Russia, Prime Minister Dmitry Medvedev said Wednesday, adding that high losses forced on large deposits convinced Russian investors to keep assets at home.

"We need to thank our EU partners for what they did in Cyprus because they showed the worst example of how to conduct confiscation policy," Medvedev told the Russian parliament during a question-and-answer session, the Itar-Tass news agency reported.

Russians, who held an estimated 26 billion dollars in Cypriot bank accounts, have been hard hit by the levy, which taxes up to 60 percent of deposits of more than 100,000 euros.

"This was enough evidence for a significant number of people why it is better to hold money in your own country," he was quoted as saying.

The Russian government has been trying to stem huge capital outflows from the country. Last year alone, 56.8 billion dollars were moved out of Russia, according to the central bank.

However, critics say that success has been elusive. During the first three months of 2013, total capital outflow from funds that invest in Russia exceeded 721 million dollars, according to local media reports.

Medvedev said that no state funds were affected by the Cyprus levy and that his government would step up efforts to convince Russians to keep their money at home.

"Let's wave bye-bye to Cyprus and offer additional assistance to those who want to keep their assets inside the country," he was quoted as saying.

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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