He said the warning signs that Cyprus’ banks had stretched beyond their capacity, by paying high interest rates and gambling depositors’ funds in marked-down Greek government bonds, were visible two years ago.
“Our accounts are not in Cyprus,” he said. “We are not idiots.”
He said Russian oligarchs were among those likely to be the biggest losers when the two biggest banks took their “haircuts” on major depositors. But he said much of the funds were “not clear and clean. I don’t feel so bad for them.”
But other major Russian enterprises, including steelworks and other manufacturing industries, had deposited money in Cyprus because it earned higher interest and could be moved about much more easily than in the more regulated Moscow environment, he said.
Sergei said he wouldn’t invest in Cypriot real estate because it was priced at some two and a half times the real value. “It should be totally distressed before I move” into the market, he said.
Limassol’s Russian-speaking mayor, Andreas Christou, defended the presence of Russians and other East Europeans here as just another community, smaller in size than the Britons and Germans and followed by those of Israelis, Egyptians and other Arabs. He said allegations that Russians were using Cyprus as a money haven were nonsense.
“We are an open city,” he told visiting reporters.
As for the allegations that Russian oligarchs use Cyprus to launder money, the former national interior minister said, “I think some operations might be under question” but “these operations are taking place all over the world.”
“I don’t agree to accuse all businesspeople, including Russians, as gangsters,” he said.
The main surprise of the banks’ reopening was how smoothly it appeared to go, at least on the first day.
Cypriot President Nicos Anastasiades expressed his “deep appreciation towards the Cypriot people for the maturity and spirit of responsibility they have shown at a critical time for the stability of the Cypriot economy."
But many Cypriots see the harsh price imposed on savers and depositors as part of a plot by Germany and other northern European countries to seize financial advantage.
Even Christou, a relative moderate who’s viewed as a contender for the top office on the island, seemed to buy into the conspiracy theory. He said Anastasiades’ accession to the European Union’s demands “was done under the extreme pressure of our European partner” and that many Cypriots thought it was “a punishment.”
“To a certain extent, I agree,” he said. “Somebody wanted to kill the international business in Cyprus, to expel Russians from Cyprus and to invite them to other financial centers.