Black smoke from the conclave between Nicosia and Moscow. After the no of the Cypriot Parliament to the measures imposed by the EU in exchange for the 10 billion bailout yesterday the island's finance minister, Michalis Sarris, flew to Russia to try to obtain economic support from the Kremlin (the news had been released by the Interfax news agency). At the moment, however, there is no agreement and negotiations are continuing.
Sarris said talks with his Russian counterpart, Anton Siluanov, were "very good, very constructive and frank." The negotiations will continue "in another venue", or - again according to an Interfax source - in the office of Deputy Prime Minister Igor Shuvalov, who is in charge of the Medvedev government for economic policies and the federal budget.
Cyprus asked Moscow to extend the duration of the 2,5 billion euro loan received two years ago and to reduce the interest rate, currently at 4,5%. Some rumors also speak of the request for an additional five billion credit. According to the latest rumors, the smallest EU state has offered in exchange a share in Cyprus' undeveloped offshore gas reserve, although Russian authorities have denied any interest from the Kremlin in this regard.
Most of the large assets parked in the island's banks are of Russian origin (many suspect that they are mostly proceeds from illicit activities and laundered in the sun). Of the 91,5 billion euros deposited in Cypriot institutions, 18,3 billion officially belong to Russian citizens.
Meanwhile the Eurogroup he said he was ready to quickly hold a new extraordinary meeting on Cyprus if the country puts forward concrete proposals to guarantee the 5,8 billion euro revenue envisaged by the package of measures rejected yesterday. “It is not known when Cyprus will put a proposal on the table, perhaps today – reported European Union sources quoted by France Presse -. The eurozone will only meet this week if Cyprus makes concrete proposals”.
Among the measures requested in Cyprus, the most controversial is certainly the maxi levy on current accounts. Euro area countries are willing to change the supertax, but only if the final revenue remains unchanged. To prevent capital fleeing the island in the meantime, the banks have been closed since last Saturday.
