Cyprus Bailout Deal Will Hit Russian and British Depositors Hard
The EU Commission and Cyprus have agreed on a deal to save the bankrupt nation: out of 17 billion euros that the country needs, 10 will come form Europe and 5,8 will be raised from extraordinary taxation on deposits.
Banks have closed and transactions have been suspended to prevent a run on the banks.
In the numbers: 6,75% levied on deposits up to 100 000 euros; 9,9% levied on deposts over 100 000 euros; corprate tax rate is to go up from 10% to 12,5%.
In compensation, deposit holders are receive shares of the troubled banks, and those who have had their deposits for at least two years receive a stake in Cyprus' natural gas deals.
It is expected that the most affected will be Russians and British with stakes in Cyprus; the Russian assets alone total approximately $20 billion.
Updates to follow.