Cyprus, a small Island off the Mediterranean, has been going through some financial troubles. Victim to money laundering two of the largest banks in Cyprus have been close to shutting down. Because Cyprus had such low taxation rates and a welcoming relationship with Russian citizens, many Russians immigrated to the Island, held large amounts of money in the banks, and invested in real estate, only to have a “haircut.”
The “haircut” refers to the Cypriot governments attempt to raise 7 billion Euros to receive a bailout from Troika. So what they decided to do was tax anyone that had over 100,000 euros in the bank, in an effort to raise this money.
Cypriots are outraged, discouraged, and scared as unemployment rates increase, fearing that what happened to their neighbors in Greece will happen to them. The people that are not scared are the Russians that are in Cyprus. Many of them are “depressed” that the expensive boutiques that cater to the Russian and Cypriot elites have been a little slow, but all in all they are not as fearsome as the Cypriots that have everything on the line.
The Wall Street Journal Europe had a gripping story on how Russians have already moved their money to Switzerland, “a better place” according to one Russian Lawyer that is residing in Cyprus.
It is very interesting to me that Russians in Cyprus are still living a lavish life and aren’t as affected as Cypriots are although they are permanent residents in the country. Some have been affected but in very minimal ways.
Publications used:
www.dw.de
www.ekathimirini.com
The Wall Street Journal Europe
The Australian News
Cyprus-Mail.com