View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
20 March 2013updated 22 Oct 2020 3:55pm

Cyprus: sunny doesn’t equal safe

A timely reminder.

By Sophie Mazzier

The recent announcement by the Cypriot government regarding the levy on savings accounts has caused a bit of a stir, to say the least, even though it’s now been defeated. 

Depending on your vantage point, it can be seen as an unlawful expropriation of assets or a desperate measure to secure the EU bailout package, or somewhere in between. But whatever your stance, the overriding concerns must be:

1. At what cost (in terms of national and international confidence)?
2. And will it set a precedent for other governments facing similar economic problems? I am sure other governments will be observing the ripples closely, anxious to avoid a tsunami on their own shores.

While bank bashing is currently all the rage (both onshore and offshore), it’s a salutary reminder to those looking for a depositary jurisdiction to consider all the pros and cons – not just fiscal – of the recipient jurisdiction.

To the layman, it might appear that the sunnier the clime, the lower the tax rate, which certainly has its appeal. However, as recent events have shown, it is vital to look closely at political stability and robust regulation as well as the fiscal climate when forum shopping.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

As Marios Skandalis (perhaps an unfortunate surname in the circumstances), vice president of the Cyprus Institute of Certified Public Accountants, points out: “The whole banking system is based on trust. If the trust is lost, the whole system is going to collapse.”

This must be a lesson for everyone. Surely a banking system based on rigorous financial regulation and complete transparency rather than trust, would fare better? Then the (incorrect) analogy between the atmospheric climate and the economic climate would no longer be drawn.

Sophie Mazzier is counsel at private client firm Maurice Turnor Gardner LLP

This blog first appeared on Spear’s.

Content from our partners
Where do we get the money to fix the world's biggest problems? – with ONE
Labour's health reforms can put patients first
Data science can help developers design future-proof infrastructure

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU