CYPRUS - MORE QUESTIONS THAN ANSWERS

CYPRUS - MORE QUESTIONS THAN ANSWERS

Cyprus has long been known as the Russian equivalent of the Cayman Islands, for major corporations such as Gazprom etc. to park their excess funds offshore. The rich of Russia, and ex CIS countries, whose vast  fortunes come from political patronage, frequently from ex KGB connections,  not only spend their summers there, flying in on private jets to enjoy their luxury yachts, but also have offshore companies making investments globally.

How then can it be that the total recorded Russian ex CIS  funds, in Cyprus banks are a paltry EUR 30 Billion, when a provincial bank in Switzerland has a similar amount on deposit. Equally when we compare with the US Fortune 500 companies, they have USD 2-3 Trillion offshore, poor Russia can only manage 1% of this amount. 

There has to be a strong presumption that the amount of cash parked in Cyprus is vastly greater than reported. How could this happen, well just look at J P Morgan misreporting the London Whale losses, to the regulator, and poor poor Mario Draghi who "knew nothing " about the Monte Paschi unrecorded losses?  It is also in the Russian interest that the real amount in Cyprus remain a tightly held secret and no-one in Cyprus would have found objection with that.

Te other fascinating thing is that if we take the Cyprus reported bank deposits   EU deposits peaked in 2010 at EUR 60 Billion and then fell into sharp decline to around EUR 18 Billion today.while the Russian amounts continued a steady rise from EUR 20 Billion to EUR 30 Billion today. What did the Europeans know that the Russians did not?

While Geopolitics is certainly not my speciality, it is nonetheless worth noting, that Cyprus has recently discovered offshore Gas, where Gazprom is ideally positioned to provide finance and technical assistance, and Russia is once again trying to expand its influence in the Mediterranean by having a Mediterranean fleet.  

Russia to preserve its interests, has also provided several Billion EUR of financing to Cyprus, and as the biggest client of Cyprus banks certainly wants an important seat at the table. This Russian omni-presence in an EuroZone country is undoubtedly little appreciated by the Brussels-Berlin axis, not to mention the USA.

The fact that the Cyprus banks are insolvent is a very convenient Sword of Damocles, because a bail out is needed and the latest EU inspired attempted theft from depositors, almost certainly threatens much greater Russian interests than the reported USD 30 Billion.

What is amazing however is that any Cyprus politician would take his life in his hands and vote for expropriation of Russian KGB money in order to please the Brussels paper tigers.