A Russian Dimension To The Eurozone Crisis

With the end of summer, Europe's political leaders are intensifying their efforts to address the Eurozone's economic and monetary crisis. For a variety of reasons, including a favorable tax treaty with Russia, Cyprus has become the preferred jurisdiction for many Russian companies and financial institutions to establish holding company structures, joint venture vehicles, and offshore corporate entities. Given Russia's strong business connection to Cyprus, for many companies and financial institutions operating in Russia, the impact of the Eurozone crisis on Cyprus is of particular interest. This Mediterranean island nation joined the European Union in 2004 and adopted the euro as its official currency on January 1, 2008. As a result of the Eurozone financial crisis and inability to tap the international debt markets to finance its deficit, Cyprus has recently appealed to Russia for a €5 billion bailout, which only underscores the island's importance to the Russian