Mar. 21 - Cyprus scrambles to agree a Plan B, but finds itself trapped in a powerplay between Russia and the EU as German elections loom on the horizon, says Standard Bank’s Tim Ash.
A separate politicians such desperate for plan B focus is turning increasingly to Russia's role in this unfolding drama. With the Cypriot finance minister in Moscow premium Medvedev has likened the EU's behavior to -- born in a China shop standard banks to -- Joins us Tim is it fair to call this a Russia EU stand off up power play -- with Cyprus little more than a port in the middle. I think that's true and I think it's also related to elections and Jim -- singled on the stock elections coming up in September. The issue of of Greece and Cyprus. And German taxpayers bailing out European brief area. Polarism and then deposits as has been a pretty high up and obviously the fact that. Cyprus Gaza a launch. Foreign depositor base much of which is Russia. And it is -- he played very much in the domestic audience in Germany so he touted another dime mention. What did you make of Medvedev bull and a China shop -- Well I mean I -- think that was that almost a little bit ironic given -- if you go back to 982000. I'm in Russia why -- off about sixty billion of of of foreign and invest is Paul found it was in terms of tko so. I mean it's is kind of interesting that he he made that comments. But I mean I think it's fast it's the approach that Detroit can seems to be trying to push in Cyprus I mean imposing a Levy on deposits is. Is incredibly -- usual and I think for most. Mutual -- would argue that it's it's a hugely risky strategy. What do you think Sam when you yes Cyprus described as as a Russian money laundering machine. Well I think that's a little bit over done as well I mean the cypriots would argue that the various financial sector tax losses have been over its it's accounts and given it a clean bill of health. And I think if if you remember that that the total stock. All Russian deposits in Cyprus is estimated around twenty billion US. I estimates. That capital flights out of Russia since 1991 on the end of the Soviet Union is about one trillion dollars. And I think much more money is actually much more Russian monies invested in the UK in Germany in Western Europe except yourself. Again I think it's been a little bit of effect to the cypriots that there's always focus on -- Russian money. Through -- I think we're also blame in many respects -- the whole Western Europe accepts this cash. With a little. Little complaints. How noticeably other Germans in particular watching the situation especially about the money laundering allegations. What is insisting that they they -- in particular that's a listen a couple of years ago and now. Obviously there's a domestic agenda and political Don mentioned now suddenly that their waking up and listen to it but again. Just going back I -- I think we we have problems throughout the international financial system. And not to Cyprus. In the in them in -- you've got problems I'm -- in the US mills have problems -- I mean I think we need to focus on Cyprus itself its problems. And how we soon. This economy around what implications. Detroit his proposals in terms of and levying taxes on the poses half of the wider. And European and in fact international financial system I think this is incredibly dangerous the approach it's been taken I think focusing on. The narrow. Issue of the of alleged money laundering through Cyprus is is I think. A little bits I'm -- the cypriots frankly. All right -- many thanks Tim ash from standard bank line from the London Stock Exchange. -- the trouble this is --