Moscow: No Bailout for Russian Savers in Cyprus

A security guard stands at the entrance of a branch of the Cyprus Popular Bank, Laiki as people queue up on March 29, 2013 in Nicosia. (Photo: AFP/Getty Images)

One of the more controversial aspects about the recent financial crisis in Cyprus -- where savers were told a certain percentage of all their bank deposits would be taken and contributed to the country's bailout -- was the issue of foreign depositors.  Wealthy Russians, in particular, have a habit of storing their money in Cypriot bank accounts.  Are they expected to pay for the country's bailout as well?

At first it seemed as though Russia might step in to prevent some of the staggering losses Russian depositors would have to stomach, but a senior Russian Cabinet member says his government won't protect those who are losing money in Cyprus.  They may, however, offer assistance to some Russian state companies.

First Deputy Prime Minister Igor Shuvalov said in televised remarks Sunday night that it would be a "great pity" to see Russians lose up to 60% of their Cypriot deposits, but that the Cabinet won't take any action to soften the blow.

Russia's President Vladimir Putin (R) chairs a meeting devoted to energy in Moscow's Kremlin on July 10, 2012, with First Deputy Prime Minister Igor Shuvalov (L) attending. (Photo: AFP/Getty Images)

Early reports indicated that Russia might donate several billion toward Cyprus' bailout, if Russian savers could be spared.  That way the government wouldn't have to deal with each claim individually.  But according to the Associated Press, Shuvalov also added that his government sees no reason to offer any any assistance in that regard.

Big depositors at Cyprus' largest bank may be forced to accept losses of up to 60 percent of deposits over 100,000 euros -- far more than the initial 6 percent to 10 percent estimated under the European rescue package proposed several weeks ago.

But while Cypriots were unable to withdraw their savings as international creditors arranged a deal, Reuters reported that money was "oozing" out of Cypriot banks, largely onto Russian soil.  Still, it won't be enough to prevent some losses.

Russian Prime Minister Dmitry Medvedev has disparagingly said the EU handled the crisis "like a bull in a china shop."

​The Associated Press contributed to this report.

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Related:

• Shock, Anger, & Fear: Here’s the International Reaction to Cyprus’ Shock Tax on Bank Deposits
• Big Savers at the Bank of Cyprus to Lose up to 60 Percent
• What Cyprus Portends for America