MINSK, April 19 (RIA Novosti) – Sanctions imposed by the European Union on Belarus over its human rights record saved Belarusian businessmen from taking a Cyprus deposit "haircut," President Alexander Lukashenko said on Friday.
“The Europeans took a swipe at two-three dozen major businessmen, almost threatening they would not let them into Europe, would take away their money and freeze their accounts. So, they [Belarusian businesses} had to take their money from Cyprus and other [British] Virgin Islands [offshore zones],” Lukashenko said in his annual state of the nation address.
In October 2012, the EU extended its sanctions against individuals and companies linked to the Belarus government, saying Minsk had failed to improve its human rights record. The sanctions are part of the EU policy of "critical engagement" with the government of President Lukashenko in an attempt to push it to implement political reform.
“Now they [Belarusian businessmen] are saying thanks to the President [Lukashenko] that they were not let into Europe because of him,” Lukashenko said.
Russia's Prime Minister Dmitry Medvedev said on Wednesday domestic state-controlled and private companies have not sustained any losses due to the financial crisis in Cyprus. That refers to all “state structures and even a significant number of private companies,” he said.
“What happened in Cyprus has not in any way affected our programs,” he said.
Many Russian banks and companies have done business in Cyprus since the 1990's, taking advantage of the nation’s low taxes and lax business regulations. Russian banks held about $12 billion on deposit with Cypriot banks at the end of 2012, while Russian corporate deposits accounted for another $19 billion, according to estimates by the international rating agency Moody’s.
Cyprus has had to agree to overhaul its banking sector and introduce "haircuts" for bondholders and savers with accounts of over €100,000 in the country’s two biggest banks, in return for the much-needed €10 billion ($13 billion) bailout from the European Union, the European Central Bank and the International Monetary Fund.
Under the rescue deal, Laiki Bank, the country’s second largest lender, will be broken up and its deposits of less than €100,000 will be moved into the Bank of Cyprus, the country’s largest bank, which will be restructured. Laiki Bank’s deposits of over €100,000 will be frozen and used to resolve its debts, while depositors with more than €100,000 at the Bank of Cyprus could face losing up to 60 percent on their savings.
