Cyprus: Much Of Russia's Investment 'Corrupt'

A prominent economist has told Sky News that much of the cash deposited by Russians in Cypriot banks is "corruption money".

The comments from Ivan Tchakarov, chief economist at the Russian investment bank Renaissance Capital, came as Cyprus is set to impose a one-off tax on bank accounts as part of a 10bn euro bailout.

Speaking on Jeff Randall Live, Mr Tchakarov pointed out that with an estimated $30bn of Russian money currently held in Cypriot banks, depositors from his country are likely to be forced to pay out around $3bn.

He went on to say: "I think this is not a secret - and I refer to a very interesting interview that our outgoing central bank governor of Russia did a couple of weeks ago.

"He said that about 40% of all the capital outflow that has been leaving Russia for many years now is actually related to suspect money, corruption money, money that is being siphoned off Russia into offshore locations, including Cyprus."

Mr Tchakarov also added that if the outgoing governor was allowed to give such an interview, it means there is a certain desire these days within the political establishment coming from Russian president Vladimir Putin "to tackle corruption inefficiencies in the Russian economy".

Earlier, Mr Putin branded bank levy as "dangerous", while finance minister Anton Siluanov warned that the move could affect a decision by Moscow on restructuring its 2.5bn euro loan to the Island.

Cypriot politicians are due to vote on the bailout plan later on Tuesday, while the country’s banks stayed closed on Monday and are not expected to open again until Thursday.