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Cyprus finance minister heads to Russia

Reported by AAP
Tuesday, March 19, 2013
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Cyprus Finance Minister Michalis Sarris is heading to Moscow amid an explosion of anger over an EU bailout deal that could cost Russian investors billions of euros.

Local media said the main aim of the visit was to discuss a 2.5 billion euros ($A3.14 billion) loan that Moscow extended to Nicosia in 2011 at a rate of 4.5 per cent.

Sarris's brief was to lower that rate and extend the loan's expiration date until 2020 from 2016, the reports said.

In exchange, Moscow was reported to be seeking details about Russian billionaires who held accounts on the island. Russia was also said to be interested in buying a majority stake in Cypriot lender Patriot Bank that is in need of rescue.

However, the discussions could be awkward in the wake of the weekend announcement that the terms of a 10-billion-euro bailout include a levy on bank savings in Cyprus.

Estimates vary but the Moody's rating firm estimates that Russian companies and banks keep up to $US31 billion ($A30 billion) in Cyprus. The figure accounts for a third to a half of Cypriot deposits.

Russian President Vladimir Putin on Monday hammered the proposed tax as "unfair, unprofessional and dangerous".

Russian Prime Minister Dmitry Medvedev too slammed the harsh terms of the deal.

"We should say this directly: this simply looks like the confiscation of other people's money," Russian news agencies quoted Medvedev as saying.

01/11/2014 19:16Sydney, Australia. 1 November,2014
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