Russia, in a bid to expand its role in resolving the financial woes of Cyprus, is open to restructuring its loans with Cyprus on the condition that its interests especially of VTB Bank are protected. This condition was announced by Moscow's Finance Minister.
Russian financial institutions and other companies flooded money into Cypriot banks since the 1990s, taking full advantage of lowered tax rates and relaxed business regulations. When the dam broke on Cyprus financial issues, many of these Russian capitalists and depositors were caught flatfooted especially when it was announced as part of the bailout package that a 'haircut' on deposits would be undertaken. The haircut means a loss of a proportion of those deposits above Eur 100,000 or US$128,400 in accordance with EU bailout regulations.
According to Russian Finance Minister Anton Siluanov, "We held general talks about the need to increase the participation of the Russian Federation in negotiations over Cyprus, since we are a creditor." He added that after his meeting with Euro Zone and IMF officials, he wanted to send the message that their participation is hinged on "our interests are taken into account."
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