Thank God for the Russians

WITH THE squeeze on at home, Russians are moving their money to European financial institutions, and Cyprus is becoming one of the main beneficiaries.

Russians are becoming increasingly important tourists and property buyers in Cyprus, and they also may well be the main reason the island has yet to feel the pinch from the global credit crunch.

With the government likely to guarantee bank deposits of €100,000 per account holder, reports are in that the flow of Russian money to the island’s banks could even be on the increase.

Already, according to Finance Minister Charilaos Stavrakis on Friday, Russians hold between 40 and 50 per cent of deposits held by non residents.

Total deposits held by non-EU residents amounted to around €16 billion at the end of August, which means as much as €8 billion could be Russian money.

Stavrakis said there had been no withdrawals of deposits either by Cypriots or Russians.

“Deposits from Eastern Europe haven’t fallen. In fact, they have risen, though not dramatically, even though it would have been logical to expect a small drop because of the pressure on Russians,” a banking source told the Sunday Mail.

But experts also warn that complacency is not an option given that no one knows how long the international crisis will last.

Europe and the world could be experiencing merely the beginning of a long recession that will ultimately inch its way into every aspect of global economy.

“For the moment, Russians’ pockets are unhurt by the credit crunch. It’s not until their economy is affected that we’ll see a fall in consumption,” said one analyst.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.