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Russia’s PM to discuss ‘quite actively’ with EU in Moscow the Cyprus financial crisis

March 21, 2013, 2:04 UTC+3

One may affect the Russian-Cypriot agreement on the avoidance of double taxation

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MOSCOW, March 21 (Itar-Tass) – Russia’s Prime Minister Dmitry Medvedev during the upcoming negotiations on Thursday and Friday in Moscow with representatives of the European Union intends to discuss “quite actively” the Cyprus financial crisis. In an interview with European media, he warned that while settling the crisis it would be necessary to “act most attentively,” as “there may be very-very many consequences.”

One may affect the Russian-Cypriot agreement on the avoidance of double taxation. “I do not know whether we need such an agreement in this situation. Its termination can become an issue to consider,” he said.

“We support efforts aimed at bringing order to the financial sector, revitalising banks and opening up information on account holders and beneficiaries. All these are normal things to do, but they should not cause the banking system to collapse,” the prime minister said.

In his opinion, the Cypriot banking system “is in a very difficult situation. It has basically been brought to a halt, let alone the fact that the financial situation in this EU member country is on the verge of default,” he said.

“We believe that they should have discussed such negotiations and decisions with different interested parties rather than hide behind phrases that it is inappropriate for Cyprus to discuss this with someone else,” Medvedev said. “Then let them make all decisions only within the EU. But I am not sure that this is so good,” he added.

Medvedev recalled that several Cypriot ministers are now visiting in Russia, and First Deputy Prime Minister Igor Shuvalov met with them on his instructions. “I hope that as thoroughly considered a decision as possible will be made to help Cyprus and not to upset our relations with the European Union,” Medvedev said.

A source at the Russian delegation, before the Russian Government – EU plenary meeting scheduled for March 22, Prime Minister Dmitry Medvedev will have a meeting with the European Commission’s Chairman Jose Manuel Barroso. The meeting will also feature First Deputy Prime Minister Igor Shuvalov, Deputy Head of the Government’s Administration Sergei Prikhodko, Russia’s Ambassador to the EC Vladimir Chizhov, a deputy foreign minister and a deputy minister of economic development.

The source says the meeting “will discuss issues close to the agenda.” The parties will analyse the trade and economic relations, will give an outlook of the Russia-EU cooperation opened by Russia’s membership in the WTO and the Customs Union’s formation. The source specified three topics: the utilisation duty, cooperation in agriculture, and cooperation in aviation and use of trans-Siberian routes. No major details are expected for the discussion, and still the Russian sides hopes it would be able to “fix certain progress on the issue.”

Besides, the source said Medvedev was planning traditionally to raise the visa issues. The representative said it would be unlikely to expect any special breakthrough results there. “The dialogue on the visa-free regime has two tracks,” he said. “One is a visa-free track, and the other is a track for simplifying the existing procedures. Here, in the framework of the simpler procedures, we are speaking about service passports. There is certain progress towards simplification.” The source spoke also about improved administration services at consular sections and embassies of the EU countries; the number of claims had been decreasing, and there are fewer unreasonable delays or refusals.

“We are not expecting a breakthrough here. We shall be using this platform as well in order to persuade them to move forward,” the source said.

Another topic for Medvedev and Barroso to discuss will be the energy, including the adoption of the Third Energy Packet, and the issue of drafting a new basic agreement between the Russian Federation and the European Union. A member of the Russian delegation said Barroso could raise some topics, connected with Russia’s chairing role at G-20. “We shall be interested to hear Barroso’s comments on the situation in the euro zone,” the source added. He continued saying that the Russian government is concerned by the fact that the EU measures to introduce the ten percent tax on deposits in Cyprus banks may be tested in that country and later may be used in the euro zone’s other problem states. “We are not for testing literally confiscation measures in Cyprus, a small country,” he said adding that a similar situation may happen later on in Italy, Spain or Portugal. The source said, during the meeting, “Dmitry Medvedev will express the view we do not believe it to be a most appropriate variant.”

The source stressed the measures suggested by the EU are not approved by everyone. “We are for a collective, transparent and clear to all decision, which should be agreed not individually, as it refers to everyone,” he said.

The Russian Government – EU Delegations plenary meeting is scheduled for March 22. During the meeting, the participants will review the bilateral relations, and the special accent will be made on the trade and economic cooperation, the energy, the industrial policy, security and justice, liberalisation of the visa regime, innovations and scientific and technical cooperation. The source said Medvedev and Barroso would be expected to make reports and comments on the relations between Russia and the EU. The discussions of the announced topics will continue during a business breakfast.

The parties are expected to sign several documents. Russia’s Minister of Energy Alexander Novak and The European energy commissioner Gunter Ettinger will ink the roadmap of the Russia-EU energy cooperation to 2050. A source at the Russian delegation says it is a framework document, which does not dwell upon the Third Energy Package. “However, the roadmap will give the first ever comment on the South Stream. Any detailed parameters will be discussed by experts,” he said.

Russia and the EU will also sign a joint statement of the Head of EMERCOM Vladimir Puchkov and European Commissioner for International Cooperation, Humanitarian Aid and Crisis Response Kristalina Georgieva on cooperation in civil protection. The third document will be an administrative memorandum on mutual understanding between Russia’s consumer rights watchdog, Rospotrebnadzor and the European Commission for Health and Consumer Protection, which will offer approaches, objectives and the structure of a dialogue in consumer protection.

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