Medvedev compares Cyprus bank levy to Soviet era

You don't necessarily expect Russians to be the paragon of financial rectitude, but the country's prime minister Dmitry Medvedev has dismissed the saver-bashing proposals in Cyprus.

by Michael Northcott
Last Updated: 19 Aug 2013

Cyprus’ finance minister, Michael Sarris is still in Moscow today, trying to negotiate a bailout deal with the Russian government, but last night prime minister Dmitry Medvedev got shirty about the previous proposals to tax Cypriot savers to prop up the banks. He said ‘I cannot compare it to anything, but some decisions made at a certain period of time by the Soviet authorities that did not care much about people’s savings.’ So you are comparing then, aren’t you?

When the Cypriot parliament rejected plans yesterday to make savers stump up for a portion of the bailout package for failing banks, all hell broke loose. Emergency meetings in Moscow between Russian and Cypriot finance ministers, a media flurry about what would happen next, and lenders worried that complete financial meltdown was imminent.

The talks are ongoing today, with European Commission president Jose Manuel Barroso also in Moscow today for meetings with the Russian PM to help hash out a deal. The situation is intensifying though: EU leaders have said Cyprus has until Monday to formally agree a deal, or it will switch of the tap of the Emergency Liquidity Fund, which is currently being used to keep the financial system afloat.

Banks are being kept closed until Monday, too, which seems to be the best way of guaranteeing that there is a run on them when they finally do open - even if a deal has been reached.

To see MT’s previous coverage of the maelstrom Cyprus faces, click here.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today