Nothing.

And why should Russia not think of itslef. I think this is a smart move on their part!

Banks trade to be allowed to trade on the premise they can be used when required and bailed out later by joe public. I guess the Libro fixing isnt even worth a mention. Which is of course more corruption and not a jail term given to date.
This is a game as ever and the poor suffer. The Euro is a fraud. Its time Cyprus followed the Icelandic model and the rest of us these these banker controlled governments to do the same. Blame Germany no not really but those that want a single government and single currency.

While it is possible in principle that, given proper motivation, Medvedev could lean on Gazprom hard enough to force it to buy worthless Cypriot oil rights or to become a part investor in a bank that will most likely fail within 6 months and wipe out the entire investment, it’s far from obvious that Medvedev is sufficiently motivated to do that.

There are multiple parties involved. First there’s Russian government. It might be willing to help, but it can’t do much except to loan money (which wouldn’t help because the EU defined a debt to GDP cap for Cyprus and any new loan from Russia will reduce the amount Cyprus will get from EU by the same amount.) Besides, Russian government simply does not have that much money. (For perspective, annual expenditures of the Russian government on defense, public safety and law enforcement, combined, add up to somewhere around 50 to 60 billion dollars.)

Then there are large investors (oligarchs), they are able to help, but they are driven by self-interest, most of them have little to no money tied up in Cyprus, and, for them, bailing out Cyprus is mostly throwing good money after bad. They’d need a really sweet deal before they cough up a penny. Apparently Cypriot gov’t could not make the deal sweet enough

Finally, there are smaller businessmen, bureaucrats (Russian corruption is epic and there are many very wealthy bureaucrats in the country), etc. Those are the ones that _do_ have money in Cypriot banks, but they don’t have much say in the matter.

Matthew Saroff has it right about the gangsta money in Cyprus. Not only does the Kremlin benefit, but so does Russian society. Because as real tax payments increase in Russia, the Kremlin needs to pay more attention to keeping those who pay the taxes in a good operating environment.

And, the Kremlin has battled the oligarchs before. Literally. Members of the Duma have been machine gunned to death on the streets of Moscow in the past. The perception that most Americans have that Russia’s oligarchs run the country the same way Wall Street runs our White House and Congress is quite mistaken. Russian politics and society couldn’t be more different.

Russia is in a win-win here. If the EU makes Cyprus crash its banks and all the gangstas lose their hineys, that forces them to kiss the boots of the Kremlin. If Russia eventually takes over Cyprus’ banks then the gangstas have to kiss the Kremlin’s boots or lose their hineys. Russia can levy a tax, payable to the Kremlin – good enough for some nice dachas around Gelinjek. Russia’s way of levying taxes is not like the USA’s. Some may get shorn, and others (more cooperative) left shaggy.

Who else wins? Switzerland. The Swiss win big as the banking center that gangstas can really trust.

First, and most likely is that they believe that Frau Merkel will demand a haircut of the Russians under any circumstances, both for political advantage, and because of the natural hostility of former residents of Warsaw Pact nations.

The second reason is that if the ultra-rich is Russia get dinged, in the future, they may decide that a small tax bill is a reasonable price to pay for an EU and IMF which try to take most of it.

The third reason is that the Russians have been VERY concerned about their near-abroad for centuries, it’s where they have been invaded from, and they feel that an expansion of the EU presages and expansion of NATO, which they see as a ring of steel intended to threaten them.

Note that the reasons above are orthogonal: They neither reinforce nor interfere with each other, so it might be all of the above.

” Why should Russia care about its oligarchs? ”

Because they are the ones running the show in Russia and policies are made to suit their needs, not those of the country large. The very same way bankers run the show in Cyprus, which led to this insane “bail-in” scheme.

Only Vladimir Putin knows how many anguished calls he is getting from oligarchs who have money stuck in Cyprus. We own stock in Russian companies, and all of them swear blind that their Cyprus subsidiaries have their main bank accounts outside Cyprus. One had USD 70 mln there to pay for an oil rig, but they had transferred this to the seller before the deadline. They have tens of thousands of dollars in Cyprus to pay for maintenance of their legal entities, but the big money isn’t there (they say).

I’ve looked through the accounts of the Cyprus Central bank to try to get an idea of whose money it might be, but I don’t see anything there. It’s possible the Cypriots don’t know, because the corporations holding the money are anonymous shells.

I think Putin was aware that if he bailed out Cyprus, he would be seen as bailing out his own friends, and he didn’t want that. Also, he has been calling for money to be returned from offshore, and wants to use this as an example to persuade the oligarchs to return money. Russian TV even dug up an old clip of him in 2002 where he warned against using offshores. So his message to his most important audience, that in Russian, was “I told you so”. Maybe he’s saying something in private, your beloved “unspoken threat” but we have no idea what was “unspoken”.

I don’t think Putin cares very much about Cyprus, except as a bargaining chip. Medvedev has said that Russia will only decide what to do once the Troika has decided – this is actually a relatively responsible thing to do. Let the Europeans sort things out, and come in with sovereign wealth money if it makes financial sense. If the Europeans want Russian help, and they want to trade, Russia will happily bargain, but at a European level, and probably mainly about access to gas markets.

Russia doesn’t want Cyprus’s gas, as it has more than enough of its own, that is less and less easy to sell as time goes by. The Cyprus gas is a pig in a poke, as it’s offshore, and if they find anything, it will be immediately disputed by Turkey and Israel. The Russians have billions of cubic metres of their own undisputed gas that they will want to sell in the future. If anything, they want the Cyprus gas _not_ to be exploited. If the Europeans want the Russians to help out, they will have to help Gazprom. The Europeans know this, so they are not asking.

Only Vladimir Putin knows how many anguished calls he is getting from oligarchs who have money stuck in Cyprus. We own stock in Russian companies, and all of them swear blind that their Cyprus subsidiaries have their main bank accounts outside Cyprus. One had USD 70 mln there to pay for an oil rig, but they had transferred this to the seller before the deadline. They have tens of thousands of dollars in Cyprus to pay for maintenance of their legal entities, but the big money isn’t there (they say).

I’ve looked through the accounts of the Cyprus Central bank to try to get an idea of whose money it might be, but I don’t see anything there. It’s possible the Cypriots don’t know, because the corporations holding the money are anonymous shells.

I think Putin was aware that if he bailed out Cyprus, he would be seen as bailing out his own friends, and he didn’t want that. Also, he has been calling for money to be returned from offshore, and wants to use this as an example to persuade the oligarchs to return money. Russian TV even dug up an old clip of him in 2002 where he warned against using offshores. So his message to his most important audience, that in Russian, was “I told you so”. Maybe he’s saying something in private, your beloved “unspoken threat” but we have no idea what was “unspoken”.

I don’t think Putin cares very much about Cyprus, except as a bargaining chip. Medvedev has said that Russia will only decide what to do once the Troika has decided – this is actually a relatively responsible thing to do. Let the Europeans sort things out, and come in with sovereign wealth money if it makes financial sense. If the Europeans want Russian help, and they want to trade, Russia will happily bargain, but at a European level, and probably mainly about access to gas markets.

Russia doesn’t want Cyprus’s gas, as it has more than enough of its own, that is less and less easy to sell as time goes by. The Cyprus gas is a pig in a poke, as it’s offshore, and if they find anything, it will be immediately disputed by Turkey and Israel. The Russians have billions of cubic metres of their own undisputed gas that they will want to sell in the future. If anything, they want the Cyprus gas _not_ to be exploited. If the Europeans want the Russians to help out, they will have to help Gazprom. The Europeans know this, so they are not asking.

Only Vladimir Putin knows how many anguished calls he is getting from oligarchs who have money stuck in Cyprus. We own stock in Russian companies, and all of them swear blind that their Cyprus subsidiaries have their main bank accounts outside Cyprus. One had USD 70 mln there to pay for an oil rig, but they had transferred this to the seller before the deadline. They have tens of thousands of dollars in Cyprus to pay for maintenance of their legal entities, but the big money isn’t there (they say).

I’ve looked through the accounts of the Cyprus Central bank to try to get an idea of whose money it might be, but I don’t see anything there. It’s possible the Cypriots don’t know, because the corporations holding the money are anonymous shells.

I think Putin was aware that if he bailed out Cyprus, he would be seen as bailing out his own friends, and he didn’t want that. Also, he has been calling for money to be returned from offshore, and wants to use this as an example to persuade the oligarchs to return money. Russian TV even dug up an old clip of him in 2002 where he warned against using offshores. So his message to his most important audience, that in Russian, was “I told you so”. Maybe he’s saying something in private, your beloved “unspoken threat” but we have no idea what was “unspoken”.

I don’t think Putin cares very much about Cyprus, except as a bargaining chip. Medvedev has said that Russia will only decide what to do once the Troika has decided – this is actually a relatively responsible thing to do. Let the Europeans sort things out, and come in with sovereign wealth money if it makes financial sense. If the Europeans want Russian help, and they want to trade, Russia will happily bargain, but at a European level, and probably mainly about access to gas markets.

Russia doesn’t want Cyprus’s gas, as it has more than enough of its own, that is less and less easy to sell as time goes by. The Cyprus gas is a pig in a poke, as it’s offshore, and if they find anything, it will be immediately disputed by Turkey and Israel. The Russians have billions of cubic metres of their own undisputed gas that they will want to sell in the future. If anything, they want the Cyprus gas _not_ to be exploited. If the Europeans want the Russians to help out, they will have to help Gazprom. The Europeans know this, so they are not asking.