The impact of Cypriot financial crisis on Ukraine will be smaller than on Russia due to the smaller amount of investment in Cypriot banks by Ukrainian business, Ukrainian Prime Minister Mykola Azarov has said.
“The amount of Ukrainian capital investment can be assessed only indirectly – it is smaller than that of Russia… The [Ukrainian losses] are smaller than the Russian ones,” he said at a press conference in Kyiv on Tuesday, March 19.
“This will not have such serious consequences for us as for Russian capital,” Azarov added.
He said that in the future Ukrainian investors would more thoroughly take into account risks in decision making when investing in foreign financial structures.
He said that Ukraine has not taken punitive measures to settle the financial problems. The premier advised the public to deposit money in the national currency at Ukrainian banks.
Azarov also said that the delay with making the tough punitive decisions on some deposits by the Cypriot authorities increases risks for the global banking system: a rapid decision will close the chapter on the crisis, he said.
“The decision from a global point of view is a risky one for the whole banking system. I hope that the decision is made very quickly: the longer the debates and vagueness continue, the more it will influence the situation,” the premier said.
“One should not allow a crisis of distrust to spread with a domino effect,” he added.
Azarov also said he felt sorry for the Cypriot authorities, as the state authorities face a choice between default and a tough tax decision.
As reported, Cyprus is trying to find a solution that will allow it to obtain external financial aid to fulfill its current liabilities.
The European Union and International Monetary Fund decided to issue a EUR 10 billion aid to save the island from bankruptcy. The Cypriot government intends to raise an extra EUR 5.8 billion through the introduction of a one-time tax on deposits.
