Greek Cyprus offers passport to big foreign losers in banks

LIMASSOL, Greek Cyprus - Agence France-Presse

Greek Cypriot President Nicos Anastasiades (L) talks with Chairman of the Bank of Moscow, Russian Mikhail K. Kuzovlev in this photo. AFP photo

President Nicos Anastasiades said on April 14 that foreigners with bank deposits in Greek Cyprus who lost at least 3 million euros ($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 with it 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 the coastal resort of Limassol.

He said the measures, primarily affecting Russians, would be approved at a two-day cabinet meeting that started 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 Greek 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 Mediterranean country’s two largest banks.

Russians have billions of euros in deposits parked in Greek Cyprus, with estimates ranging from 5-31 billion euros. Moscow was angered when it emerged they would lose part of their money under “haircuts” demanded in return for an EU 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.

The government is also “examining various scenarios which could permit the compensation of part of the losses which shareholders of banks, holders of debt securities and depositors have suffered,” he said, without elaborating.

Advantages of EU passport

Russians at the conference pointed to the obvious advantages of having a European Union passport, but some were left unconvinced.

“It’s true that for a Russian national having a Cyprus passport is a good thing because Cyprus is part of Europe,” Vasily Novikov, a Greek Cyprus-based Russian entrepreneur.

Turning to the hydrocarbon reserves discovered off southern Greek Cyprus, Anastasiades invited Russian energy firms to take part in development of the fields on which his country is pinning its economic recovery hopes.

“My government is determined to swiftly proceed and implement all the necessary steps in order to realise the significant potential for Cyprus to become the eastern Mediterranean’s energy hub,” he said. “I therefore urge more companies from the Russia Federation involved in the oil and gas industry to demonstrate interest in getting involved and exploiting the great prospects of Cyprus’s energy sector.” He voiced confidence that Russian-Greek Cypriot business links would remain strong.

“Cyprus will remain a reliable partner to all those entrepreneurs and investors interested in international expansion and will retain its position as a significant international investment hub for Russian and Greek Cypriot business,” Anastasiades said.