tv Cross Talk RT July 8, 2013 5:29am-6:01am EDT
right to see. first street. and i think you're. going to. be in the. hello welcome to this edition of sophie and co the ones economy's suffering through worst turbulence since the time of the great depression an attempt to stay afloat the western states come up with some of the most radical solutions but the question is is it working. at
a time of mass protest and disenchantment in the global economy save itself from its sales clouds gather overall shore leave and gold charlene's wallpapers value. giants to challenge the world the old guard is holding on protecting itself from the new kids on the trading. how can they keep their face in the game and save their currency. in time is running out to what cyprus brain has but far been 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 i think about chords well as russia's a decorative prime minister on economic issues and we can't it's fair to say all o'neill economist ok so so we're going to talk economy now. i want you to take a look at this graph. there were several media reports saying that there were about
from five to thirty billion here as 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. well it's his depleted numbers but nobody knows exactly as some people put money in a straightforward way. using all names other people are used to france and cyprus or legal entities to do. names at the height of the auction saw i think the number is pretty big certainly higher than twenty billion dollars so one thirty billion i would i would say it's common i was so it is certain is probably the right number but again nobody knows exactly what he was or so much russian money in their wealth. was convenient as. it is more friendly i am not far away from russia is it too easy to travel.
jurisdiction is good stocks are so low and also. quite good and convenient to operate to receive distance auctions across the 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 are americans were using cyprus as well but again for russians it was the cause of the economy and really actually the charges and it separates was the most popular for russian up till now ok do you know how much russia lost proximately. few billion but nobody more until the whole story will go and everyone who has money in the stands and most of. all the fans most of the savings
lost but what were the 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 rich that some of the russian state controlled banks have subsidiaries in cyprus and we do have the need to be bank likely to be bank and. the government was very active in protecting the property or for me to be as the government to show mine shareholders to be it was about fifteen billion dollars and i think it was successful. you separate successful you know in cyprus and the actions were lifted after
a certain period of time so i think the russian government so the president were doing all the right things to protect those properties but did russian guard lose anything at all this whole similar story in the russian government didn't was because i mean. this signs of this crisis looming were coming before march and everyone really knew about it. but the key. things that changed 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 came clear that cyprus isn't huge that program russia was actually helping with the russian for cyprus giving it quite a big loan. actually after after the crisis in cyprus
the decision to improve long 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 what happened the wait happened all european countries are under stress. and europe is on the bigger threats such as this is like unprecedented. and nobody i think nobody believes in europe feel that they've been too precious cyprus is the be part of deposits i think that was not. expected by anyone in any quantity to buy a new normal garment but major european countries who decided that they don't want to cope 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. share or for the deposit base 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 in the not happened no we are news that. cyprus is under stress so it was government was the question because support from the russian government a number of occasions but we thought the cyprus issue because of similar way is the greek issue but i was in the way that it was real you know when this whole thing was going on and angela merkel in particular she's 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 stuck to russia when thirty billion dollars of thirty billion euros are in spanx. so therefore there was
a conspiracy theory that eva was going to do this anyways they were going to have the hair cut 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. i know the arguments of for. such a. nature but i think all the arguments being think 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 world and 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 money is a go to europe or in. cyprus is
a well. is a. haven for big amounts of money cyprus will do all for its problems and they would have done it anyway i guess i think i think that the russian. factor will fuck that was not big icing on a cake yes maybe yes and there were also much. yes here's a graph also going to 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 vindictive reason to but i'm pretty sure the. most of those funds. were conducted to cyprus in the legal way with most money laundering. it was more to do. with dividends 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 dream of the russian war tuxes what it was legal but what's funny is that like you mentioned british money it's about quarter of the foreign investment in cyprus that they didn't really make such a five's about their money being cut off was that. we were much more we were
thinking of quite like i brought something about what they were doing things as well but do you think cyprus is actually setting a line how europe will act in the future are you saying that if you were a real insight to in a similar way in other countries so that will lead to the disaster of the big seems 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 the issue of 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 it could could could that actually be a reason. for cash outflow from europe in general. except maybe for. the. banks yes europe the european banking system to be heard by and by the action since people feel. believe that for this happened cyprus happened in spain
i'm used to the tundra to my dear. uncertain grade i ran away from the boarding school with my friends round to the tundra. the tundra is just miskito so. i don't know how people can live there to get in there no t.v.'s in the tents how can i send my child to boarding school that 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.
i would rather i asked questions for people in positions of power instead of speaking on their behalf and that's why you can find my fellow larry king now right here on r.t. question more. welcome back to so think oh we're talking about the cyprus crisis and our guest today is russia's deputy prime minister i've got to do a college who knows
a lot about economy and so we're talking about the sappers fallout in the first part on the drop of that we did have 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 the days of russia can become one of the global financial centers or or at least regional financial centers was. on the table. long before cyprus crisis when the crisis. started to solve and eight across the world. and tribulations in europe and here in the united states after the election by g twenty. stuff the door. for results that maybe russia can actually. be transferred into
a better financial tradition for for the money for the not being held in europe or the united states interested to. be more convenient for brinks or investment companies or for people to. be put in russian. we started to reduce taxes on financial transactions on savings in. the poor inflow of crypto stuff that in two thousand and ten to be pretty much teachin 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 cannot make the case that the russian banking system is one of the safest and we make that case i think so i think russian banks have better capital position than many banks and in europe in united states right now we explain well basically russian banks
were much more conservative than most banks in the war. our company is. always saying that it's very 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 point 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 or america you think that you know these are established economists and i'm going to really trust it happen tomorrow when you think russian economy globally you don't think it's like the safest most stable economy in the world because. people who think simply don't
understand much about banking system you know they first think will address i have my money saved me a bank that has a stable economy surely i mean well i think we should be provided nobody i think is . thinking seriously including prime minister medvedev that the whole of russia can become short of them for the worth of the whole but russia can become one of the convenient countries to war korea's capital and one of the countries researching percent income tax is the key factor for individual investors low income tax. russia can surf was an extra drizzy action that can be used for continued by investment banks in europe the banks as well also we were thinking about making far east as one of the. centers for my needs that. i've been convinced of to in 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's thinking seriously both to transferring crusher into the not sure and i'm sure sure country when it's an idea it's a work in progress or you guys actually well know all make especially in an offshore place. people try to. do this but we are not. real not trying to birthdates financial services in so highly in our our wall used to make so highly in the. in the three more secret i would give us the. place is clean for investments i wonder what japan will say about that i think then japan will start computer eating. even. islands and.
from pretty much a point of view not a political point of view. going because of the creole islands means putting money in. and trying to take what he waves from from russia well here's another graph let's take a look at that this clip 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. is a part of for normal life and nobody's saying that. should be liquidated the global economy will stop before force will cease to exist. the ideal for. international makers is to make sure it's more transparent presently could be 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. close offshore certain things will be going much better i think everyone from jordan stands that if you will do this you should reduce taxes domestically. for the economy to grow. economic growth is supported by offshores taxes are lower and people are investing future amounts of money from offshore since the mainland or on the quantum is 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 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 four d. . but the game doesn't. means 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 what and i mean it's 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 can can say through the losses but governments will not write to you could date overflowing and 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 in part before frame your savings most of my wife's savings and the snow from our financial accounts completely transparent to our neurosis well that's. normal they were speculation of for money but most of our
saves as to when robles not in europe but i think do you ever see if you think the dollar at this point. about 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 u.s. economy is bigger in the. years ahead of it easier for is stronger than the european central bank that's clear that's why still most of the final production the growth of the world are in bowlers but you are the second. strongest currency in them because of the rising. currency in asia and china is lifting capital control step step by step for year by year you are now. getting stronger and stronger and you'll become eventually one of the reserve
currency across the world. you know currency wars 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 shortly because we're coming to an end is brics survey is trying to create its own bank because they figured out i.m.f. and the world bank are dealing the way they should be dealing with their business. we spoke to zuma president of south africa recently when he was in sochi and here's what he had to say listen to that they say one cry from developing countries that if the established banks today or financial institutions. are very discriminatory they're not allowed in other parts of regions of the of the world to participate and there's been a lot of debate about the need to transform the financial institutions that existed 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 these instructions 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 will be on that would say as a result of them approaching these institutions they were able to grow and get out of trouble. but first of all do you agree with what he's saying. oh you know yes but. in. number you congress were saying that we need but the war bring better i.m.f. . but their management and source. institutions and the progress is very slow and then the idea for a patient breaks for instance came to the table and. we discussed but i would like
to stress that the terms of reference is for the potential. strong students on the radio 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 either a right but again the. nature of the institution in what it's going to do more and most important thing not the places you'll be lucky but so many people are broke but you see quick what there. will be and 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 i don't know this is a really far off perspective to look for but you know they'd be 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 of the focus on the developing world. and the confidence that brics produce are 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 the new congress that i was and the. 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 a country they help them but they say you know but you need to change these things these days in order for us to help the russian position is that we should not political at all so far into the system reality is always more complex and because
it was a political considerations from what they can think on but again for for financial institutions i think it is not. efficient to use the police got against reasons of decision making all right it's been great talking to you i tell you that i'm going to thank you very much for being with us today and i will see you next time this with sophie and co with me sophie shevardnadze.
calls for an uprising in egypt as a muslim brotherhood claims the army massacred dozens of supporters calling for ousted president morsi to be freed the military insists terrorist are to blame. rush revelations from edward snowden he claims the us national security agency worked closely with germany contradicting chancellor merkel's recent anger at america's quote cold war tactics. plots. the wounds of civil war in mali are yet to heal as the country has towards its first post conflict election with security threats still looming.