Russian President Vladimir Putin was expected to have talks with German officials during a visit here Sunday on differences over Cyprus’ financial crisis and concerns about the Kremlin’s crackdown on civil society organizations.
Germany is Russia’s No. 3 trade partner, but ties have become increasingly strained recently over the Kremlin’s heavy-handed response to opposition groups, differences over the Syrian crisis and other issues.
The Cyprus crisis, which has badly bruised Russian investors, has become the latest irritant, and it is expected to figure high on the agenda of Putin’s talks with German Chancellor Angela Merkel in Hannover, where the two leaders will attend a trade fair today.
Before the meeting, several dozen people protested outside the Hannover convention center against the Russian government. Merkel told German ARD television in Hannover on the sidelines of the trade fair’s opening ceremony Sunday night that while the two countries had close economic relations, “our political talks will also incorporate controversial topics.”
Speaking to ARD television before the visit, Putin harshly criticized the tax on bank deposits introduced by Cypriot authorities as condition for a $12.8 billion bailout from international lenders. Savers with more than 100,000 euros at the Bank of Cyprus could face losses of up to 60 percent on their savings as part of the rescue deal.
Russian depositors, who have as much as $26 billion in Cypriot banks, are expected to be among those who will suffer most.
“Is that fair, that people invested their funds, merely deposited their money with banks without breaking any laws, whether the laws of Cyprus or those of the European Union, just to see 60 percent of their deposits forfeited?” Putin asked. He added that the Cypriot move “undermines the credibility of the banking system of the entire eurozone.”
Putin angrily rejected allegations that Cyprus had become a “laundry for dirty money” from Russia, saying that such claims have to be proven and that the EU has allowed the creation of an offshore zone on Cyprus and other places in Europe.
Putin’s talks with Merkel could brush upon the Russian government’s crackdown on nongovernmental organizations, which Putin sees as tools for Western interference in Russia’s domestic affairs.