Russia: Cyprus bailout shows EU’s ‘lack of values’

Ambassador Chizhov.jpg

EXCLUSIVE / Europe’s claim to be a union of values is looking “rather bleak," Russian ambassador Vladimir Chizhov has told EURACTIV in his first public interview since the Cyprus bailout

Chizhov – who previously worked in Cyprus as a diplomat (1985-1992) and Russian special representative (1997-2000) said that the Cyprus bailout – known as a “haircut” for larger depositors – is tantamount to a ‘scalping’.

Portraying the large number of Russians residing on the island as oligarchs was “a big misperception in the Western media,” he added.

Oligarchs may hold money in Cyprus, he said, “but those Russians resident there are either representatives of SMEs or retirees.”

In a provocative move, the Russian ambassador said that the Cyprus bailout should be assessed against “the EU’s lofty words about values”.

Union of values looking rather bleak

Giving depositors a haircut was inconsistent with the sanctity of private property, while capital controls breach the freedom of movement of capital, Chizhov said, adding: “All this makes the point of a union based on values [seem] rather bleak, with due respect to the complexity of the situation of course.”

The envoy said that Russia would continue to have “excellent relations” with Cyprus, and would renegotiate the repayment terms of the €2.5 billion loan made to the island in 2011.

He also refused to rule out further assistance, insisting that “whatever we do will not be carried out in competition with the EU.”

Chizhov said that Russia was especially sensitive about Cyprus, because of “painful periods of its own history” – such as the Bolshevik Revolution and a 1990 currency crisis – “when assets were confiscated and people lost their savings.”

Eurasian economic union offers Ukraine full membership

Addressing EU enlargement, the Russian envoy said his country had learned from Brussels' mistakes in rolling out its own Eurasian economic union, and was offering Ukraine “full membership.”

The ambassador resisted attempts to portray Ukraine as shuttling between Brussels and Moscow, and “having to choose and decide who to follow”.

“The EU has never promised – and in my view will never promise – full membership of the EU to Ukraine. Whereas the Eurasian economic union is from the outset offering full membership to the Ukraine,” Chizhov explained, highlighting the importance of such a trade bloc.

Heralding the strong cultural and economic ties between Russia and Ukraine, he said: “So when Western commentators speak of ‘Russian-speaking eastern Ukraine’, that sounds ridiculous, because the whole of Ukraine is Russian speaking, in parallel with Ukrainian.”

He said that a period of “difficult relations” between Russia and the Ukraine during the reign of former Ukrainian president Yuschchenko “is now behind us”.

“The Ukrainian people have seen that these policies were not leading them anywhere.”

NATO fighting new battles with old tools

Russia viewed EU enlargement as a “natural process”, the ambassador said, but it expected the EU “to be equally receptive and tolerant of parallel integration processes such as Eurasian integration, which – I can assure you – goes along the same lines as EU integration did years ago.”

He said that one of the lessons Russia learned from European integration and would apply in Eurasian union, “is that focusing too much on enlargement at the expense of deepening the integration may backfire at some point.”

Meanwhile the Russian envoy dismissed NATO enlargement, as “an attempt to address security challenges of the 21st century with the means – both strategic and materiel – of the mid-20th century, created for different purposes and in different times.”

Syria: Lifting arms embargo would breach EU declaration

Addressing the ongoing Syrian crisis, he said that the Franco-British push to lift the arms embargo on the Syrian rebels “sounds like distorted logic to me”, since they believed “that supplying arms to one part of the conflict will help to end the violence.”

Once Assad was ousted, he said, the rebels “will immediately start fighting each other using those very weapons the French and the British intend to supply, and which others are already supplying.”

Such a decision would also breach the EU’s own Code of Conduct on Arms Exports of 1998, he said.

“This document, created by the EU itself, stipulates that arms should not be supplied to zones of conflict or to countries where human rights are violated. How that fits with the intentions of Britain and France I do not know,” Chizhov explained.

The ambassador said that opposition to the Franco-British move at the last EU summit “gives me some ground to conclude that reason still prevails within the EU!”


Cyprus clinched a last-ditch deal with international lenders on 25 March to shut down its second largest bank and inflict heavy losses on uninsured depositors, including Russians, in return for a €10-billion bailout.

>> Read: Last-minute deal for Cyprus to hit large depositors

Swiftly endorsed by eurozone finance ministers, the plan will spare Cyprus a financial meltdown by winding down Popular Bank, also

known as Laiki, and shifting deposits below €100,000 to the Bank of Cyprus to create a "good bank".

Deposits above €100,000 in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and recapitalise Bank of Cyprus through a deposit/equity conversion.

The raid on uninsured Laiki depositors is expected to raise €4.2 billion. Laiki will effectively be shuttered, with thousands of job losses. Bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution.


  • 2013: Ongoing negotiation of the terms of repayment of a 2011 €2.5 billion loan from Russia to Cyprus

Further Reading


  • Russian Permanent Mission to the European Union: website

Press articles

Subscribe to our newsletters