x Abu Dhabi, UAEWednesday 26 July 2017

Cyprus passports offered to foreigners who lost at least €3 million in EU bailout

Most of the money being raised by Cyprus to qualify for the bailout is to come from a hit of as much as 60 per cent or more on deposits above €100,000 at the country's two largest banks.

LIMASSOL, Cyprus // Foreigners with bank deposits in Cyprus who lost at least €3 million under an EU bailout for the island would be given citizenship, the president said.

"Non-resident investors who held deposits prior" to the bailout and lost "at least €3 million [Dh14.4m] will be eligible to apply for Cypriot citizenship", which brings with it an EU passport, President Nicos Anastasiades said.

"We believe that a number of measures to be adopted could on the one hand mitigate to some extent the damage the Russian business community has endured," he told a Russian business conference on Sunday.

Most of the money being raised by Cyprus to qualify for the bailout is to come from a hit of as much as 60 per cent or more on deposits above €100,000 at the country's two largest banks.

Russians have billions of euros in deposits parked in Cyprus, with estimates ranging from €5-€31 billion. Moscow was angered when it was announced their citizens would lose part of their money under "haircuts" demanded in return for an EU bailout.

"I wholly acknowledge and share their understandable bitterness and apprehension caused by the coercive manner with which the Eurogroup agreement was imposed on my government," Mr Anastasiades said of the Russian business community.

The government is also "examining various scenarios which could permit the compensation of part of the losses which shareholders of banks, holders of debt securities and depositors have suffered", he said, without elaborating.

Russians at the conference pointed to the obvious advantages of having a European Union passport, but some were left unconvinced.

"It's true that for a Russian national having a Cyprus passport is a good thing because Cyprus is part of Europe," Vasily Novikov, a Cyprus-based Russian entrepreneur in his 50s, said.

"But a passport doesn't solve the problem of businesses which fear a repeat [of a haircut on bank deposits], and it's now difficult to operate in Cyprus."