Cyprus tax opponents got a less-than-desirable endorsement from Vladimir Putin, patron of the oligarchs, Karlsson writes. The last thing opponents of the Cyprus tax needs is anything that creates the perception that opposition to the tax is based on a desire to protect the oligarchs, he adds.
The key reason why Cyprus, unlike other bailed out countries, has been ordered to impose a steep one time tax on deposit holdings is of course because Cyprus has a reputation for being a bank center for Russian oligarchs of considerable wealth, and considerable crookedness. And so, bailing out the banks of these Russian oligarchs would be interpreted as bailing out the oligarchs. And to say that it would be a "tough sell" to get support for what is perceived as the bailout of oligarchs in the countries bailing out Cyprus is the understatement of the year.
The only way to make a bailout politically acceptable then was to make sure that the oligarchs would pay. Of course, the way this is designed, regular Cypriotic savers become collateral damage in the quest to punish the oligarchs.
Anyway though, the point is that the more this is perceived as punishing Cypriot savers the more opposition will there be against the tax, and the more this is perceived as punishing Russian oligarchs the more support will there be for it. And so the last thing opponents of the tax needs is anything that creates the perception that opposition to the tax is based on a desire to protect the oligarchs.
And so what does, Vladimir Putin, patron of the oligarchs (those who support him that is, those that didn't have been disposed of) do? Express outrage over the tax! Not what those fighting against it needed....