Cyprus bailout: Kremlin 'could punish Europe' in reprisal for bank levy

[dkf]

http://www.guardian.co.uk/world/2013/mar/23/cyprus-bailout-kremlin-reprisal-bank-levy

Fears are growing of Russian reprisals against European businesses as EU authorities desperately seek a deal to save the Cypriot economy by imposing a 25% levy on bank deposits of more than €100,000.

As the island scrambled to put together a rescue programme, its finance minister, Michalis Sarris, said "significant progress" had been made on the latest levy plan in talks with officials from the European Union, the European Central Bank and the International Monetary Fund.

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However, with Russian investors having an estimated €30bn (£26bn) deposited in banks on the island, the growing optimism about a deal was accompanied by fears of retaliation from Moscow. Alexander Nekrassov, a former Kremlin adviser, said: "If it is the case that there will be a 25% levy on deposits greater than €100,000 then some Russians will suffer very badly.

"Then, of course, Moscow will be looking for ways to punish the EU. There are a number of large German companies operating in Russia. You could possibly look at freezing assets or taxing assets. The Kremlin is adopting a wait and see policy."

[djean111]

1. I was just reading that Cyprus is sitting on huge amounts of natural gas,

which makes the cold hard politics of this more interesting - the gas likely cannot start flowing (or whatever) until about 2020, though.
This is over at economywatch.com; don't know how legit this is, but interesting enough to do a little digging.

[dkf]

2. Analysis: Cypriot gas no fix for country's funding gap

LONDON | Fri Mar 22, 2013 3:11pm EDT
(Reuters) - Cyprus' gas is worth less than $2 billion based on reserves found so far and there may be too little to develop anyway, leaving plans to mortgage them against a $13 billion bailout unlikely to fly, Reuters research has found.

So far, an estimated 200 billion cubic metres (bcm) of natural gas worth $80 billion at current prices have been discovered in the Aphrodite gas field in Cypriot waters.

The Cypriot government says that it hopes to begin exports of liquefied natural gas (LNG) from 2018, although most analysts say production is unlikely to begin before 2020 and some doubt whether the fields will be developed at all.

"If Cyprus has found only 7 trillion cubic feet (200 bcm) right now, that's not yet enough to think about doing LNG given the number of projects ahead in the queue, such as the over 100 tcf of gas already found in East Africa," said Kim Fustier, oil and gas analyst at Credit Suisse.

http://www.reuters.com/article/2013/03/22/us-eurozone-cyprus-gas-idUSBRE92L11H20130322

[djean111]

3. Ah. Thank you! Hmmmm....

I hate to be cynical , but maybe the article I read was floated by someone who wants to sell natural gas futures or whatever, so they had a reason to exaggerate.
It is getting so that I kind of disbelieve BOTH sides of a story - and have come to accept that I may never know the real truth about much of what happens out in the world. Too many agendas.

[dkf]

4. The Cypriots were dangling this in front of the Russians to get them interested in a bailout.

That was a glimmer of hope early on, but the Russians didn't bite.