Cyprus yesterday ordered its financial institutions remain shut until next week as officials scrambled to stave off a financial meltdown and a run on the banks.
The Mediterranean island’s banks were set to reopen today, but officials decided to close them until March 26 after the federal government failed to come up with a rescue plan for its troubled financial system.
On Tuesday, the Cypriot Parliament voted 36-0 against a bank-deposit tax proposal that sparked demonstrations in the streets by thousands of protesters.
The fears of the nation’s retirees and mom-and-pop savers — whose bank accounts could have been hit with a onetime tax of 6.5 percent to help pay for a European Union bailout — were joined yesterday by those of the many Russian playboys who have moved to this tax haven.
Up to a third of bank deposits in Cyprus are owned by Russians.
The playboys, drawn to the island nation for its warm climate and lax banking regulations — in addition to its generous tax incentives — can be seen spending as much as $2,300 a day to rent a Maserati.
A new deep-water marina for super-yachts will be ready in Limassol, the nation’s second-largest city, by the summer.
With the playboys spreading around so much cash, the marina and a related development were expected to bring 1,000 jobs to an economy broken by the Greek bank crisis.
Cypriots feared the steep bank-deposit tax would not only steal from their hard-earned savings — but also force out the Russians, along with their cash and jobs.
“We have lots of businessmen from Russia who are trying to build their businesses here,” said Anna Lasova, 30, of Prestige Car Rental in Limassol, which boasts Maseratis and Aston Martins in its fleet.
So it was no wonder then that yesterday frenzied Cypriot officials turned to Russia, their longtime friend to the east, for a handout.
Finance Minister Michael Sarris was in Moscow asking for a $6.4 billion loan — as well as a five-year extension on some $3.2 billion Russia has already lent Cyprus — it was reported yesterday.
But the talks yielded little in the way of cold, hard cash.
“We had a very good first meeting — very constructive, very honest discussion,” Sarris said after a meeting in Moscow with his Russian counterpart, Anton Siluanov.
Cyprus only turned to Russia after island lawmakers on Tuesday voted down a $12.9-billion EU-led bailout — tied to the bank tax.
“Of course every Russian person is worried. We hope and we believe that Putin will save this situation,” Lasova told The Times of London.
Russian media have reported that oil and gas giant Gazprom has been eyeing the exploration rights to Cyprus’ offshore gas deposits.
With Post wires