So I’m sitting in a restaurant eating my lunch and, up on the wall, the large-screen television is tuned to CNN, where a lengthy report is unfolding about a European Union plan attempt to raise the corporate tax rates on Cyprus, a land in which wealthy Russians have funneled billions into tax shelters.
It’s all quite complex and offers yet another wrinkle in the larger financial crisis in Mediterranean markets and governance. This is a valid and important story.
I have not been able to find an online version of the exact CNN story that I saw earlier today, but here is a piece of a CNN Money story about the showdown, under the headline, “Why Russia is irate about the Cyprus bank tax.”
It’s easy to see why some in Russia are unhappy with a new proposal from the European Union to levy a one-off tax on Cyprus bank deposits of up to 9.9% in exchange for €10 billion in bailout money to help the government pay its bills. If most of Russia’s deposits get hit with the top tax rate, which applies to accounts holding €100,000 or more, the country’s citizens stand to lose more than $3 billion.
Russian President Vladimir Putin slammed the bank-tax proposal, while Prime Minister Dmitry Medvedev called it “just like a confiscation of someone else’s money.”
There’s a suspicion that not all of that money was obtained honestly. Cyprus is believed to be a harbor for ill-gotten gains. The country “remains vulnerable to money laundering; reporting of suspicious transactions in offshore sector remains weak,” the U.S. Central Intelligence Agency wrote in its country brief.
Again let me stress that this is important and valid news.
What kept poking me, however, were all the on-screen headlines and prompts stressing that Russia and Cyprus share a long history of cultural, political and economic ties. It seemed that every time I looked up from my meal, there was a new caption offering a variation on that theme.
So why is Russia so involved in Cyprus? Money and politics, of course, which is true. In CNN wire-service coverage, that sounds something like this, with commentary from Marios Zachariadi of the economics faculty at the University of Cyprus:
Zachariadi said Greek Cypriots and the Russians have had a special relationship for centuries, with the Russians helping the Greeks during their war for independence in the early 1800s. Cyprus was one of the first countries to welcome Russian money after the collapse of the Soviet Union. Both nations share a rocky history with the Turks.
Yes indeed, that is part of the picture. But what is missing?
The answer is tragically obvious: Centuries of ties linked to Eastern Orthodox Christianity.
Here are some relevant numbers from the website of the Cyprus embassy, describing decades of destruction of priceless sacred, cultural and artistic treasures: