Russia Rejects Cyprus Financial Rescue Bid as Deadline Looms
Source: Bloomberg
By Olga Tanas and Ilya Arkhipov - Mar 22, 2013
Russia spurned Cypruss offers of assets for a bailout as the island nations lawmakers begin debate on legislation to avert a financial collapse.
I think we arent able to get the support that we wanted to get, Cypriot Finance Minister Michael Sarris said in an interview after checking out of the Lotte Hotel in Moscow. But we must go back home because things are getting serious.
Cypriot lawmakers begin debating legislation today to prevent a financial meltdown as the European Central Bank threatens to cut off a lifeline for the countrys banks in three days unless a bailout agreement with the European Union is reached. Russian companies and individuals may have about $31 billion of deposits in Cyprus, which in turn is the biggest source of foreign direct investment in Russia.
The only thing that Cyprus could hope for is Gazprom buying some reserves from them, Vladimir Kolychev, head of research at Societe Generale SAs Rosbank (ROSB) unit in Moscow, said by phone. Its not clear what these gas reserves are worth, and apparently Gazprom wasnt particularly interested.
Read more: http://www.bloomberg.com/news/2013-03-22/cyprus-s-sarris-to-leave-moscow-without-russian-financial-help.html
dipsydoodle
(42,239 posts)The IMF/ECB/EU aka The Troika will then consider over the weekend whether or not Cyprus's intentions can be put in place in time for Monday when the liquidity program shuts down. The solvency of their banks is thus dependent on what Cyprus does : not the 10 million bailout which would follow all being good. If on Monday the banks were deemed to be insolvent it would become illegal for them to open.
Russia has said it will now wait for the outcome of the Troika meeting.
In the meanwhile here's some interlude music from the Grimethorpe Colliery Band.
ps - as I write it looks like they will tax all deposits over 100,000 at 15%.
dipsydoodle
(42,239 posts)7 more measures to go all of which are expected to be approved.
Details of capital controls here : http://www.democraticunderground.com/101658715