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Putin criticizes Cyprus' new "dangerous" savings tax

14:29 18/03/2013

MOSCOW, March 18 - RAPSI. President Vladimir Putin has called a new tax in Cyprus "unfair, unprofessional and dangerous," his press spokesman Dmitry Peskov said, as quoted by Prime agency. The new tax will be imposed on bank deposits.

According to Peskov, Putin held a daily briefing with his aides and economic advisors on Monday morning to discuss the economic situation in the eurozone.

Earlier reports said that the Cypriot government was in bailout talks with international financial institutions. Cyprus ended up agreeing to a series of unpopular policies in exchange for financial aid. The changes will affect those with savings accounts at local banks, including Russians.

One of these policies is a one-time levy on bank deposits which may apply immediately when banks reopen after the weekend. Monday is a nonworking day in Cyprus, which means a 10% levy will be debited from large savings accounts on Tuesday. Bailout loans from the EU and the IMF are conditional on this levy. It is virtually impossible to withdraw these savings through any remote banking system now.

Russians holding $18.3 billion worth of deposits in Cyprus could lose up to $2 billion. The tax will also be levied on companies registered in Cyprus, while corporate taxes will be raised to 12.5%. Russian bank subsidiaries in Cyprus hold about $12 billion in deposits, and another $1 billion is the capital of Russian banks' and Russian companies' subsidiaries there.

On Sunday, the Cypriot Central Bank ordered banks to suspend all money transfers or payments, both local and international.

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Putin criticizes Cyprus' new "dangerous" savings tax

14:29 18/03/2013 President Vladimir Putin has called a new tax to be imposed on bank deposits in Cyprus "unfair, unprofessional and dangerous." Russians holding $18.3 billion worth of deposits in Cyprus could lose up to $2 billion.
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