THE VIEW
FROM MOSCOW
IGOR MAKAROV
Partner at Baker & McKenzie, Moscow
“A New Strategy is Needed”
“In my opinion, the recent decision
by the Troika with respect to Cyprus
was a total failure since it failed (or
maybe never meant) to address
outstanding economic problems in
Cyprus and actually triggered further
problems and resulted in a non-functioning banking system throughout
the entire country (beyond the two
problematic banks).
In Russia, business prefers to “wait
and see”, although some major banks
have started questioning the acceptability of Cyprus holding structures
in various Russian contexts, such
as loans or the internal restructuring
of various assets (even in view of a
potential “entry” of an international
investor). And this is something that
Cyprus must take into account and
address as well.
The Troika’s decision revealed the
true face of contemporary Europe
(i.e. its addiction to double standards
and ignorance of the rule of law). And
a few simple questions still remain
unanswered: Why should Greece’s
sovereign debt problem be settled
at the expense of private investors
of other pre-selected countries? Is it
because of Russian business, which
is structured via Cyprus holdings and
now it is time for Russia to pay for its
“EU ticket”? What was the real intention of the Troika’s decision: to help or
to destroy?
But let’s be honest and look back
into history. Did Ancient Rome ever
receive a friendly or at least diplomatic
Barbarian mission?
This is a real situation in which the
allegedly united Europe recently found
itself. Small countries in the EU should
realize that the “metropolis vs. colony”
philosophy is still alive and therefore
they need to urgently re-think their
strategies.
Cyprus must also devise its own longterm strategy, based on a new sustainable local economy supplemented
with strong international economic
and political connections.
Cyprus should realize that it has
several crucial and “Barbarian-proof”
fundamentals:
• Its geostrategic position in EMEA.
• 3-4 hours flying time to any business
or financial centre in Europe.
• The same or almost the same time
zone as the EU and Russia.
• An effective and attractive tax system, as well as the best network of
international double tax treaties.
• A flexible and investor-friendly legal
system.
• An effective and affordable infrastructure to administer international
holdings and trusts.
• Friendly and tolerant people.
360 days of sunshine a year.
The key now is how quickly and effectively the Cyprus authorities respond
to the challenges of the current situation.”
The Troika’s decision
revealed the true
face of contemporary
Europe
STANISLAV SAZHIN
Head of “Doctors at Work”,
an award-winning Moscowbased start-up which enables
medical professionals to
publish their research
articles for free.
“About one million dollars of our money is blocked in accounts
in Cyprus. Cyprus is attractive for Russian companies, not
because of its banks’ profitable interest rates and warm
climate but because Cyprus practices English law. English law
is the main protector for both start-ups and investors.”
THE
TH VIEW FROM THE MEDIA
“Cyprus, it is said, never misses an
opportunity to miss an opportunity.
After its euro bail-out, that needs
to change, not least for the sake of
its battered economy.”
The Economist, Apr 27th 2013
“As David Graeber put it in The
Guardian this week, austerity is no
longer an economic policy but a
moral one in which someone must be
found to pay for past profligacy. It is “a
politics of crime and punishment, sin
24 Gold the international investment, finance & professional services magazine of cyprus
and atonement”. It seems almost to
appeal to Protestant countries. They
regard Greeks and Cypriots as singular sinners, but are all guilty.”
Simon Jenkins,
The Guardian, 24 April 2013
”A eurozone that compromises
countries as diverse as Germany and
Cyprus is not sustainable, even if the
EU and Cyprus manage to find a lastminute compromise…”
Wolfgang Münchau,
Financial Times, March 24 2013