Russian money makes a comeback on Cyprus

Russian investments have been the stickiest point in negotiations between Cyprus and the Troika, a potential haircut in all investment being the main reason for the hick-up.

There is wide speculation that the reason a so called “bail-in” (a bank deposits haircut to fund the country's banking and fiscal debt) was chosen for Cyprus for the specific purpose of discouraging Russian oligarchs from investing in the island's offshore banking system.

The bail-in plan instituted a haircut in all deposits over 100000 euros, which meant taking most Russian investments lost a huge chunk of their profits. Still, a year in the island's bail-in plan, Russian offshore companies are still an important investing partner of the Cypriot banking system.

The Russian banking system is all but broken and oligarchs are in a constant search of safe banking havens. Even post bail-in, Cyprus still has the most elastic banking rules in the EU.

Naturally, all these seqestration means little for the country's unemployment figures, which are at 17.5%.