Banks in debt-hit Cyprus will stay closed until at least Tuesday, a Central Bank official told AFP, after the authority issued a decree stating banks will not open their doors on Thursday and Friday.
With Monday a scheduled bank holiday, the official said there was no prospect of banking resuming before Tuesday.
Cyprus banks have now been closed since Saturday to prevent a run on accounts after the government clinched a deal for a bailout that slapped a one-time levy of up to 9.9 percent on bank deposits.
The measure was rejected by parliament on Tuesday, plunging the island into a fresh economic crisis.
Russia may denounce double taxation avoidance accord with Cyprus – Medvedev
Russian Prime Minister Dmitry Medvedev has not ruled out that Russia may raise the issue of denouncing an agreement on avoiding double taxation with Cyprus, if the latter’s banking system stops meeting the interests of Russian capital.
“We have an agreement on avoiding double taxation with Cyprus. I do not know whether we need this agreement in this case,” Medvedev said in an interview with a number of European media and Interfax.
“The issue of rupturing the agreement, of denouncing it may be raised,” he said.
The collapse of Cyprus’ banking system may entail a lot of consequences, he said. “We have here our reasons and national interests: both banks and a large number of Russian businessmen keep their assets there.”
“And this does not mean that they try to hide behind the curtain of Cyprus’ special jurisdiction. No, this is just a comfortable form of work. You all know how a large number of firms work through SPVs, and this is a common international practice,” he said.
“There can be very, very many consequences,” Medvedev said.
Cyprus situation may evoke series of local financial crises
Russian Prime Minister Dmitry Medvedev thinks that the situation in Cyprus may be the beginning of a new series of financial crises.
“Beyond any doubt everyone in the EU is concerned about this situation which may trigger a new series of local financial crises,” Medvedev said in an interview with a number of European media and Interfax.
Asked whether the decision taken to solve the Cypriot debt problem will affect Russia-EU relations, Medvedev said: “We must wait until final decisions are made.”
Not only EU should discuss Cyprus financial problem
Russian Prime Minister Dmitry Medvedev thinks that discussions on possible solutions to the Cypriot debt problem should involve not only the European Union but also other interested parties.
“It seems to us that such negotiations and solutions should have been discussed with various interested parties, rather than hidden behind the phrase that ‘Cyprus ought not discuss it with anyone else’,” Medvedev said in an interview with Interfax and a number of European media.
“Then let them make all decisions within the European Union, but I am not sure that this is good,” he said.
EU, Cyprus actions to solve debt problem resemble a bull in a china shop
Russian Prime Minister Dmitry Medvedev has criticized the actions of the EU and Cypriot government to resolve the debt problem.
“So far actions of the European Union, the European Commission together with the Cypriot government regretfully resemble a bull in a china shop to me,” Medvedev said in an interview with Interfax and a number of European media.
“It seems to me that every possible mistake that one could have done in this situation has already been done,” he said.
Confidence in financial institutions not based in Cyprus has been undermined, he said. “Our harsh assessment is linked to this. We are for bringing order to the financial sphere in order to take measures to revitalize banks, and naturally to have transparent information on the owners of accounts and beneficiaries,” Medvedev said.
However, all of those actions should not lead to the destruction of the banking system, he said.
“Regretfully, it – the Cypriot banking system – is in a very difficult situation. In fact, it was stopped, not to say that the financial situation of this EU member is close to a default,” Medvedev said.
Voice of Russia, RIA, AFP, Interfax
http://english.ruvr.ru/2013_03_20/Cyprus-banks-will-not-resume-operation-until-Marsh-26/