Medvedev accused Cyprus in confiscation of other people's money [Armenpress News Agency]Al Bawaba Ltd.
YEREVAN, MARCH 18, ARMENPRESS: Russian Prime Minister Dmitry Medvedev on Monday called a proposed tax on bank deposits in Cyprus as part of EU bailout deal a move akin to confiscation, reports Armenpress, referring to Ria Novosti.
"We should say this directly: this simply looks like the confiscation of other people's money," Medvedev said. "I do not know who the author of this idea is, but this is what it looks like."
Medvedev also called the proposed tax doubtful and anti-market and warned Cyprus of a possible change in bilateral relations.
Earlier Russian President Vladimir Putin condemned the tax as "unfair, unprofessional and dangerous.''
Moody's rating agency has estimated that up to US$19 billion in private Russian cash is held in Cyprus. The figure accounts for between a third and half of all Cypriot deposits.
Reuters reports that the Cypriot bailout saga is far from over. The government of Cyprus is considering a raise of the already draconic 9.9% "unique solidarity levy" on the bank accounts in Cypriot banks.
A source from the Cypriot authorities told Reuters that the discussed rate of the levy is 12.5% for accounts larger than 100,000 euros. The rationale behind the proposed increase is to reduce the levy for small accounts to 3%. Such a move makes sense from a political point of view, because the holders of the small accounts are more numerous than the holders of big accounts and most of the are citizens of Cyprus who are allowed to vote, unlike the holders of the big offshore bank accounts.