tv Cross Talk RT July 8, 2013 12:29am-1:01am EDT
the global economy save itself from its clouds gather rove off shore leave the. chinese wallpapers value a. giant challenge to. the old guard is holding off protecting itself from the new kids on the street. how can they keep their faith in the game and save their currency bottom line time is running. what cyprus beilein has by far the most unexpected twist in the latest run of events around the global economy and it directly involved russia since billions of russian money were targeted in the process and to talk about that we're joined by our guest our guide to the language was russia's deputy prime minister on economic issues i mean it's fair to say although in the real economy most ok so so we're going to talk economy now. i want to take a look at this graph there were several media reports saying that there were about from five to thirty billion here us russian money russian money in cyprus most
humble estimation came from the man who knows he's the head of cyprus central bank so from five to thirty billion euros what's your number. he's depleted numbers but nobody knows so i talked with some people put my new. orleans other people. friends in cyprus or legal entities. to fight with the heightened direction so i think number is a pretty big certainly higher than for it to be. so one thirty billion i would i would say it's common i was just so to search is probably the right number but then again nobody knows that i was there so much russian money in their wealth. was convenient. not far away from russia easy to use it to travel. good stocks are so low and also.
quite good and convenient to appear a minute to destruction suppose a world to transfer money and to pay for services in the. i think the rules of the game were known for everyone not just for russian so many british people. using cyprus as well but again for russians it was the cause of the i mean traditionally the fairest and it separates was the most popular for russian up till now you know ok do you know how much russia lost. few billion but nobody more until the whole story. so everyone who has money in the stands and most. of the fans most of the savings of the last but the ones who are percentage that people will be able to
take away at the end it's still unclear. what's weird is that only thirty billion that's a lot of money ok why wasn't the russian government more proactive in saving securing their assets in cyprus the russian government is protecting saving the might was in the russian government should not care about saving the people who make it brought it wasn't just private savings then more so things were private most of saving so you had some of the russian state controlled banks have subsidiaries in cyprus and three you do have to be to be bank likely to be bank and. the government was very active in protecting the property or for b. to b. as the government to share mine shareholders to be it was about fifteen billion dollars and i think it was successful. you separate and successfully now in cyprus and restrictions were lifted after a certain period of time so i think the russian government. the president were
doing all the right things to protect those properties but did russian garden lose anything at all this whole similar story russian government didn't was because i mean. this signs of this crisis looming were coming before march and everyone really knew about cricket but the key. things that changes station dressed was the greece a lot as all european countries had to participate in saving the greece. and cyprus as well that was the usual burden on cyprus battleship and after that became clear that cyprus is in huge that problem russia was actually helping with that through. for cyprus giving it quite to be low. and actually after after the crisis in cyprus to the decision to
improve loan conditions for cyprus so that cyprus. would be pay an easier way in a few years did you personally see the signs of this looming did you think it was going to happen the wait happened all european countries are under stress. in europe is on the reader threats such as this is unprecedented. and nobody i think nobody believes that you will feel that they've been too precious cyprus to be part of deposits i think that was not. expected by anyone in any quantity by a new normal government but major european countries decided that they don't want to help cyprus anymore cyprus so it is over its only issue on so and so i would say for sure it was completely unexpected that the tradition for cyprus will be to. or caught a share or for
a deposit rates so no one was like behind the scenes warned that this was going to happen because what there was like e.u. russia summit for example i can december or january something like no one told you that it not happen. we are news that. cyprus is under stress of his government was to question could support from the russian government a number of occasions but we thought the cyprus issue because of similar way is the issue but i was in the way that it was through the you know when this whole thing was going on and angela merkel in particular she was very adamant that cyprus doesn't talk to anyone else but e.u. members and particularly not talk to russia about you know this problem which was really weird because i mean how do you expect cyprus not to talk to russia when thirty billion dollars of thirty billion euros are in spanx so therefore there was a conspiracy theory that e.u. was going to do this anyways they were going to have the haircut done but having so
much money in cyprus was like an additional extra reason to actually do it because it will also hit russian money. or in all the arguments before. in such a. nature but i think all the arguments are being taken into account when the decision is taken so i would not exclude. that german. politicians or french reputation is so we're thinking both russia's bourbons they're taking the decision but i don't think that was the main argument the main argument was that cyprus. is. hurting. the mainland the fewer poor by taking part of monies that go to europe or in. cyprus is well. is a haven for big amounts of money cyprus will do all for its problem and they would
have done it anyway yes i think i think that the russian russian factor with a fork that was not big icing on a cake you know maybe yeah there were also much spec yet because you hurt so much talk in the media about russian dirty russian money dirty work and money being you know i think politically for europeans was important dimensions of the russian money but i don't think that was going to for the decision makers to present this publicly it was good without argument but but not for not for pretty much decision making here's a graph also then take a look there were a lot of speculations in the western media that top top russia's reachout their money their saved in cyprus money laundering is facilitated by generous provisions for rich russians to gain separate citizenship some eighty oligarchy gain access to the entire you in this way in two thousand and eleven alone some eighty billion
flowed out of russia and much of that money has been channeled through cyprus a lot of people i guess like in russia felt like it was an additional you know didn't dictate reason to i'm sure here but i but i'm pretty sure that. most of those funds. were conducted to cyprus in the legal way was not money laundering. it was not the. divisions that were paid by. legal companies public companies owners of those companies russian oligarchs but no it was not about money laundering it's about but the drug trade you can do this in russia lower taxes but it was legal but what's funny is that like you mentioned british money it's about a quarter of the foreign investment in cyprus that they didn't really make such a fuss about their money being cut off was that. we weren't much more we were in a quite free library but they were doing things as well which you think cyprus is
actually setting a line how we will act in the future by saying that if you're a real insight in a similar way in other countries so that you'll need to use those to the big cities to. well for cyprus especially i mean they're trying to save its economy but considering that eighty percent of their. economy is based on financial bases financial services if there's a little who's going to put money in cyprus now nobody right many years but also like and i'm thinking globally like for you were up in general could it affect the could could could could that actually be a reason for cash outflow from europe in general. except maybe for. the. banks. european banking system to be heard by and by the action since people feel. believe that for this happened cyprus happens pretty portable.
but it's time for a short break and in the second part of the show will we'll talk about the russian offshore or any chances dunaway. wealthy british. market. what's really happening to the global economy for a no holds barred look at the global financial headlines. is a report. i'm used to the tundra. my dear.
in second grade i ran away from the boarding school to my friends to the tundra. the thunder is just miskito the threats look i don't know how people can live there to get in there no t.v.'s in the tent how can i send my child to boarding school i won't be able to sleep at night after that. they enter a life without knowledge of how to do basic things they don't get that in school. what defines a country's success. faceless figures of economic growth. for a factual standard of living.
they all told you my language or what i will only react to situations i have read the reports for. the pollution and no i will leave them to stay current a comment on your latter point to say to mr kerry you have a car it's all your talk you know god. said you know more recently or. when you made a direct question are you prepared for a change when you're done you should be ready for a battle freedom of speech and a little down to freedom to cast. i
welcome back to so think oh we're talking about the cyprus crisis and our guest today is russia's deputy prime minister. who knows a lot about economy and so we're talking about the sappers fallout in a first part on the drop of that me dave has proposed to actually create russia's own offshore. i mean what's the thinking behind that i mean who's going to put money in russia not sure because russians obviously prefer to have their money saved somewhere else they use it to russia can become one of the global financial centers or or at least regional financial centers was. on the table. long before the cyprus crisis when the crisis. started to thousand eight. and three deletions in europe and here in the united states after the action by g
twenty. stuff the door. for resource that maybe russia can actually. be transferred into a better financial tradition for for the money that they're not being held in europe or the united states and to start to do. that will be more convenient for banks or investment companies or for people. to. do people in russia. we started to reduce taxes on financial transactions on savings on didn't. it for the inflow of crypto stuff that in two thousand and ten to be pretty much station then money started to go back last year and this year because of flow of capital and this sort of maybe it after cyprus we can make the case that the russian banking system is one of the safest
and we make that i think so i think russian banks have better capital position than many banks and in europe the united states right now. explain well basically russian banks were much more conservative. as in most banks in the war. our company is. always saying that it's really difficult to get loans get credit. interest rates very high but that is one side of the story for brinks. that means that. they're not putting money in risk in transactions and for people who save money in the russian banks. picture brights and brains are not to. the point that's money but when we talk about offshore it's who look would be our clients because when you put your money in banks in america and europe you
automatically think that you know these are established economist and i'm going to really trust it happen tomorrow when you think the russian economy globally you don't think it's like the safest most stable economy in the world because sick people who think simply don't understand much about banking system you know they first think well i'll drive i have my money save me a bank that has a stable economy and i mean well i think we should be pragmatic nobody i think is. thinking seriously including prime minister medvedev that the whole of russia can become sort of them for the worth of the whole but russia can go one of the convenient countries to war korea's capital and one of the countries research in percent income tax this is a key factor for individual investors low income tax. russia can surf was an extra drizzy that can be used for. commute by investment
banks in new york banks as well also we were sinking boat so making far east is one of the. centers for my needs that. i've been convinced of the asia pacific region as hong kong and shanghai. right now and the decision to reduce the corporate taxes in the forest to make this easier but again nobody is thinking seriously both to transfer and crush injury not sure sure sure a country when it's an idea it's a work in progress or you guys actually we're all know all make a subtle and i'm sure place. we will try to. do this but we're not. we're not trying to perth various financial services in so holy in our east to make so holy in the. in the remote
would give us the island. places coming in for investments i wonder what japan will say about that i think then japan will start calculating. even. ireland since the. point of you know the political point of view. going because of the crew ireland putting money in would you rather than trying to take quite away from from russia well here's another graph let's take a look at that this crap actually shows that western european countries generate more offshore wealth than anyone else in the world pretty clear that you want so sure is down and out of existence right i mean it's only normal i think. in the part before normal life and nobody's saying that force should be liquidated the global economy will stop before flows will cease to exist. the ideal for. international decision makers is to make or force more transparent resin
politically date or the force because the feeling we're getting is that russia and e.u. actually want to d.l. sure i still think that's a wrong idea i don't want to close down offshores i think it's it's wrong but people who believe that you can easily. things will be going much better i think everyone from sweden stands that if you will do this you should reduce taxes domestically. to four for the economy to grow. economy grows is supported by offshores taxes are lower and people are investing future amounts of money from offshore since the mainland or over on the corner and this supports the economy grows you for taxes will be put to the level they are in the mainland like in russia where we have twenty percent corporate income
tax eighteen percent added tax and said that it's up to you for taxes across the world it will be the same level economic growth across the world we would much lower interest in this surprise for dear dear friend but again that doesn't mean that we should. support existing coffers we should treat them as normal a way to put money in but we need more transparency need to understand what's worth and i mean is the future of offshores i think it will be used. in the less intensive way it will be more transparent governments will know who is holding money offshore in real try to tax more ways to get the compensate for the losses but the governments will not write to you could date of the troubles so this whole cyprus operation that we spoke about was carried out to actually keep the eurozone going to save the euro. what's going to happen to that i mean do you personally buy your us for example. part of the savings to cross russia or are you are since
normal. part of frame your savings most of my wife's savings and the snow from our financial accounts the completely transparent to our neurosis well it's. normal for money but most of. ourselves as to when robles not in europe but i think do you ever see if you think the dollar at this point if it were the same i would say about the same exchange rates up and down but. as far as the quality of the currency is concerned about the same us economy is bigger in the. year. for is stronger than the european central bank that's clear that's why still most of the financial production the growth of the world are in. what you are is a second. strongest currency and then because of the rising. currency
in asia and china lifting capital control step step by step for year by year you are. getting stronger and stronger and to become eventually one of the reserve currency across the world. you know currency worries another huge topic but i'm going to have you on another program to talk about that right now what i want to talk to you about now shortly because we're coming to an end brics survey is trying to create its own bank because they figured out i am math and the world bank are dealing the way they should be dealing with their business. we spoke to zoom up president in south africa recently when he was in sochi and here's what he had to say listen to that the one guy from developing countries that is the established banks today or financial institutions. are very discriminants
they're not allowed in other parts of regions of the world to participate and there's been a lot of debate about the need to transform the financial institutions that exist to transform and the manner in which they they they are dealing with those that needs to be helped. they're using the rules that we established decades and decades ago the world has changed this incisions have not changed with the world they still remain. dealing with matters in the manner in which they do. they'll be very few countries and will be on that would say as a result of them approaching these institutions they were able to grow and get out of total. but first of all do you agree with what he's saying. oh sure you know yes but. oh for number year over year congress were saying that.
the war bring better i.m.f. . but their management in those. institutions and the progress is very slow and then the idea for creation breaks for us and came to the table to be discussed but i would like to stress that the terms of preferences for the potential. stronger students are not. and we don't know how it will look like in twenty three to create fire but they're talking about the they're talking about where it's going to be set up and it's actually a work in progress right something rather a right but again the. nature of the institution in what it's going to do more and most important thing not the place if you'll be lucky but so many people brooke but you see what there. will be so that it's at the but i would like to
stress again but we don't know you know. how much how much pressure when contributing money we don't know that either we don't know this is a really far off perspective to look for but you know take the i mean conceptually do you see how how it will be different from i.m.f. or the world bank. the key difference is there are two sinks one is focus on the. developing world. and the confidence to be expanded or very confused going to be helping cyprus or. well maybe but separating but not really in the second is a different kind of management program and so for. professionals from. united states but would you be like setting your own economic or political rules like i.m.f.
and world bank usually do when they go into country they help them but they say you know but you need to change this this this this in order for us to help the russian position is that we should not. a little. more complex and there was a political considerations from what they can think on but again for for financial institutions i think it is not. efficient to use a but it's got to convince. the decision makers all right it's been great talking to you i think about thank you very much for being with us today and i will see you next time with me sophie shevardnadze.
choose the stories but in high school life choose me access to often. you know sometimes you see a story and it seems so for lang you think you understand it and then you glimpse something else you hear or see some other part of it and realize everything you thought you knew you don't know i'm tom harpur welcome to the big picture. more news today violence has once again flared up. these are the images the world has been seeing from the streets of canada. giant corporations to rule the day.
breaking news this hour live rounds are reportedly fired at supporters of the ousted president morsi in cairo it's claimed many people have been killed or wounded as mass protests continue. pressure of elations from edward snowden who claims the u.s. national security agency has worked closely with germany interdicting chancellor merkel's recent anger at america's quote cold war tactics. but spies sprouts and accusations aside the talks are still set to open over an ambitious trade deal between the e.u. and the united states.