Who will shoulder the pain from the Cyprus bailout deal?
The first-order sufferers will be small businessmen (mostly Russian) and upper-middle Cypriots and foreign residents with their money in Cypriot banks. But the whole region will take a longer-term blow from the loss of Cyprus as a place for upstart businesses to park capital. Capital that can’t be parked cheaply in the EU won’t be invested in the EU – at least not by the smaller, less financially “connected” entrepreneurs who drive economic dynamism and growth.
The big Russian firms that bank with the Russian Commercial Bank in Cyprus have protection in the deal, Continue reading “Cyprus: When law and order prescribe theft”