Cyprus will change the law to make it easier for rich foreigners to get citizenship, including for those who lost money in the haircut on deposits imposed during the bailout of the country, President Nicos Anastasiades said in a prepared speech to Russian businesspeople in Limassol, according to Retuers.
The country, which joined the European Union in 2004, was bailed out by the EU and the International Monetary Fund (IMF) in exchange for forcing those with bank deposits of over 100,000 euros ($130,000) to accept large losses.
Foreigners who had deposits in Cyprus before March 15 when the bailout was announced and who lost more than 3 million euros would be entitled to apply for Cypriot citizenship under new legislation.
The new law also cuts the investment threshold needed to be eligible for citizenship to 3 million euros from 10 million euros.
"These decisions will be deployed in a fast-track manner," Anastasiades said, according to Reuters.
Most of the foreign investors who held deposits in Cypriot banks were Russian and while the media and some officials speculated that Cyprus was used for tax evasion and money-laundering, analysts said the money was mostly owned by middle class Russian individuals and middle-sized Russian businesses.
This is partly why Russia, to which Cyprus turned for help before deciding to raid savings, was in no hurry to lend it the money, according to one analyst.
A banker pointed out that Russian businesspeople have had a traditional relationship with Cyprusdating back to the early 1990s when the country initiated privatizations of its Soviet-era industries but its legislative and banking system lagged behind.
Cyprus was the first country to enter a treaty to avoid double taxation with Russia.
Anastasiades slammed European leaders who suggested that his country's financial system could be used for money-laundering and tax evasion, saying that now other countries in the EU were taking advantage of Cyprus's downfall.
"What saddens - I refrain from using the word angers - me deeply is that since the Eurogroup agreement was reached, some EU partners' businesses involved in the financial services industry have been preying upon our financial services sector, in order to encourage a relocation of funds into their economies," he said, quoted by Reuters.
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