Russia’s Cyprus Reaction Smacks of Hypocrisy

For a country whose government and banks reneged on tens of billions of dollars in foreign obligations during its own financial crisis in 1998, Russia has responded with incongruous fury to the prospect of a similar event in Cyprus.

Russians have a peculiar vested interest in the European Union’s efforts to rescue the island nation’s banking system. To pay its share of the bailout, the Cypriot government is planning to impose a tax on depositors, many of which are Russian entities that have long used Cyprus as an offshore haven. The levy could wipe out about 10 percent of the estimated $19 billion in deposits of Russian companies, and possibly more.