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Cyprus, EU leaders eroded trust in European banks: Putin

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Russian President Vladimir Putin

Russian President Vladimir Putin says that the banking crisis in Cyprus has revealed the unreliability of Western financial institutions.

In an interview on Friday with Germany’s state-owned ARD television before an April 7 visit to the European nation, Putin accused Cypriot and European Union leaders of undermining confidence in Europe’s banks by taxing deposits as part of the island country’s international bailout agreement.

“Forfeiture of investors’ funds — including of Russian origin — wherever it happens, in Cyprus or in other places, undermines credibility of the banking system of the entire eurozone,” Bloomberg quoted the Russian president as saying.

Putin pointed out that Russian investors who have deposits in the Mediterranean island’s banks were being found guilty without proof of being money-launderers.

“If we think that this country has been a machine for money laundering, then proof must be given,” he said.

Russian companies and individuals have around 23.8 billion euros (31 billion US dollars) of deposits in Cyprus, according to Moody’s Investors Services and Monument Securities.

The Russian president stated that his country may benefit from the Cypriot banking crisis as it will encourage Russian depositors to invest at home.

“The more you pinch foreign investors in the financial institutions of your countries, the better for us, because the affected, offended and frightened — not all of them but many — should, so we hope, come to our financial institutions and keep their money in our banks,” he said.

On March 25, Nicosia inked a 10-billion-euro (13-billion-US dollar) bailout deal, which includes a tax of up to 40 percent on deposits of over 100,000 euros in Cyprus’ two biggest banks, with the International Monetary Fund, the European Commission and the European Central Bank.


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