It appears the the Russians are not going to be extending additional credit to Cyprus, nor are they going to drop the interest or extend the loans that they have already made.<\/p>\n
Felix Salmon is perplexed<\/a>:<\/p>\n Paul Murphy<\/a>, watching Cypriot finance Minister Michael Sarris returning empty-handed from Moscow, says that \u201cMedvedev and co could not have played a worse hand during this crisis \u2014 and it\u2019s not immediately clear why\u201d. His point is that the most likely outcome right now \u2014 he calls it \u201cpopping the red pill\u201d \u2014 is that big depositors at Laiki Bank (read: rich Russians) are likely to lose some 40% of their money. Since that will make Russia very unhappy, why is Russia doing nothing to prevent it?<\/span> I think, and noted in the comments, that there are a number of motivations for the Russians:<\/p>\n Note that the reasons above are orthogonal, so it might be all of the above.<\/p>\n I do think that any tighter government integration in the EU will have to include some sort of government structure which prevents German hegemony, something like the bicameral structure of the US Congress, because this whole “Germany runs Europe” thing is working about as well as it did the last time.<\/p>\n","protected":false},"excerpt":{"rendered":" It appears the the Russians are not going to be extending additional credit to Cyprus, nor are they going to drop the interest or extend the loans that they have already made. Felix Salmon is perplexed: Paul Murphy, watching Cypriot finance Minister Michael Sarris returning empty-handed from Moscow, says that \u201cMedvedev and co could not …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1078,984,1004,964,1033],"tags":[],"class_list":["post-187370","post","type-post","status-publish","format-standard","hentry","category-disaster","category-europe","category-finance","category-foreign-relations","category-russia"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/187370"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=187370"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/187370\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=187370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=187370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=187370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/span>I don\u2019t pretend to understand Russian politics, but this move seems to me to be a classic high-risk, high-aggression play; think of Medvedev as a geopolitical hedge-fund manager or poker player, and it begins to make a bit more sense.<\/span>
<\/span>Firstly, it\u2019s worth noting that Russia is actually moving backwards<\/i> on the amount of help it\u2019s likely to extend to Cyprus. When the bailout plan was first announced, it included Russia extending its existing \u20ac2.5 billion loan to the country by five years, as well as reducing that loan\u2019s interest rate. Now, Russia is refusing to agree even to that.<\/span>
More generally, Russia is taking an absolutist stance with respect to Cyprus. No, we won\u2019t restructure the money you owe us. No, we won\u2019t buy a bank off <\/span>
you. No, we aren\u2019t interested in your natural-gas reserves. And underlying it all, of course, an unspoken \u2014 and all the more powerful for being unspoken \u2014 physical threat<\/a> to any Cypriot who causes powerful Russians to lose billions of euros.<\/span><\/p><\/blockquote>\n\n