Russian mob money ‘bolsters Cyprus’

Sunday Times

YOU can buy a mink coat or rent a Ferrari at the click of a finger. Many of the street signs are in Russian and so are some of the radio stations. Welcome to “Limassolgrad”, as the locals have taken to calling their town on the Mediterranean island of Cyprus.

It may be the southernmost town in the EU, but Limassol’s popularity among Russians puts it high on the agenda for finance ministers meeting in Brussels tomorrow to work out how to prop up Cyprus’s rickety banking system with the latest eurozone bailout.

With only 1m inhabitants, tiny Cyprus poses a giant dilemma for the overlords of the EU: Russian mobsters are believed to have deposited so much money in its banks that suspected money launderers might become big beneficiaries of the bailout.

Yet asking depositors to carry some of the burden, an idea being promoted by the Germans and Finns, could trigger a run on the banks and rekindle the sovereign debt crisis by undermining trust in the euro.

Underwriting a suspected money-laundering hub could prove just as disastrous for Angela Merkel, the German chancellor. The last thing she needs is accusations of rescuing the Russian mob as she prepares her campaign for re-election later this year.

At a projected €17bn (£15bn), the bailout package under discussion is minuscule compared with those for the Greeks and other ailing eurozone states.

But the loan is almost the equivalent of Cyprus’s gross domestic product of €18bn and failure to reach a deal could undermine Europe’s fragile recovery.

“There must be no doubt about this,” Jorg Asmussen of the European Central Bank said last month. “If Cyprus gets no external help, it will slide into default . . . and that would have high financial and political costs.”

The former British protectorate holds one trump up its sleeve: an offshore natural gas field known as Aphrodite that is big enough to power the island for a century. Revenues from energy exports could help Cyprus to pay off the debt.

For the time being, though, the Cypriot economy is underpinned by Moscow, which extended a €2.5bn loan last year.

The love affair between two Orthodox Christian nations can be traced back to Byzantine times but is evident today in Limassol, home to 30,000 Russians, where hoardings in Russian advertise sea-view flats with infinity pools.

At a fur shop near the seafront, Andreas Charalambous sells coats for up to €3,000 to a clientele that he describes as “100% Russian”. Nearby a car rental agency does a brisk business in Ferraris and Porsches for €1,500 a day.

“There is huge tourism from Russia and they want supercars,” said Savvas Savva, the manager.

Many of the yachts docked in the Limassol marina are owned by Russians; and the Russian influence is blamed for gated communities, a novelty in a town with a low crime rate. There are even schools and newspapers for Russians.

A shadow of suspicion hangs over Russia’s enthusiasm, however. Russians account for an estimated €26bn of deposits in Cypriot banks, roughly a third of the total, making Cyprus the top destination for Russian capital held abroad.

Some of it is said to be of dubious origin.

Detailed charges of money laundering in Cyprus were made by Sergei Magnitsky, a Moscow lawyer, before he was thrown into prison, where he died in 2009 amid accusations that he had been denied his medicine.

An adviser to the Hermitage Capital Management fund, he claimed Russian officials had laundered about $30m (£20m) through Cypriot banks as part of a $230m tax fraud. микрозаймы онлайн займ онлайн https://zp-pdl.com/online-payday-loans-cash-advances.php https://zp-pdl.com/how-to-get-fast-payday-loan-online.php hairy woman