Amid the turmoil created by a deadline pending in only a few days for Cyprus to come up with a bailout plan is a problem for Christian organizations that reach out to help in the Arab world of the Middle East.
The New York Times reported the mood in Cyprus was “increasingly dark” as police and protesters clashed over a bailout measure pending before the island nation’s parliament.
But critical to the Christian ministries, the banks remained closed while officials considered – and rejected – a plan to simply take 10 percent of all bank accounts, and then moved on to other ideas.
Officials were reporting that Cyprus has until Monday to reach agreement with the European Union and the International Monetary Fund for the government to get low-interest loans critical to keeping the institutions open.
But human rights groups and Christian aid organizations could lose a lot.
Religious Freedom Coalition President William Murray said the future looks bleak because many Christian human rights and aid groups use Cyprus banks to ensure aid reaches the intended Middle Eastern our south Asian countries.
“Ministries like mine have to run money through Cyprus so the recipients in Muslim nations are not targeted for getting money from the crusaders,” Murray said.
Other Christian-based human rights groups also use Cyprus.
“Several humanitarian groups were going to lose a lot of money if that heavy tax was put on their deposits. This would hurt those groups who are trying to help the poor and refugees in the Middle East,” Murray said.
Those hurt would be refugees and the poor in Middle Eastern countries.
Yet a bankrupt Cypriot government isn’t the only issue. Cyprus is also a tax haven for wealthy Europeans who open accounts to avoid the high tax rates of Eurozone countries.
“The problem is the high tax rates in the EU countries. People came to Cyprus to to avoid the high taxes in the Eurozone,” Murray said. “There were a lot of wealthy Europeans who put their money in a bank in Cyprus to avoid the EU governments taking their money from them.”
Murray says the Cypriot and EU scheme was partly aimed at billionaire Russian depositors.
“Large numbers of Russians have accounts on Cyprus. They know if they keep their money in Eurozone banks they’ll have to pay the EU’s extremely high tax rates,” Murray said. “The banks in France and Germany are subject to the high tax rates, so the Russians avoid that by putting their money in Cyprus.
“So this is an effort by the EU to try to tax money from wealthy Russians.”
Middle East analyst Daniel Greenfield says Cyprus happens to be a place where a number of groups’ interests collide.
“In Cyprus, the Russian elite looking for a safe place to put its money when the people turn on them intersected with a Eurocratic elite trying to eliminate safe harbors and cheap places to do business,” Greenfield said.
“And they all bumped into British senior citizens looking for a cheap place to retire and angry leftists with no serious economic plan, but a determination to overthrow the government,” Greenfield said.
Murray says Cyprus was Europe’s tax haven, but that changed when the island nation joined the EU. He says island residents recently became alarmed when they saw the downside to the EU.
“So when the people saw that the EU was going to force Cyprus to take 10 percent from everyone, a run on the banks started. That’s when Cyprus announced they were freezing the deposits,” Murray said.
The Cypriot parliament voted unanimously to reject the EU bailout, but that doesn’t resolve the issue of whether or not the government will still need to find a quick source of capital to bail out the Cypriot government.
The concern now is that the bailout rejection will lead to a collapse of the island’s banks and force the nation out of the Eurozone.
However, there is still a fear around the world that the proposed solution for Cyprus could become policy elsewhere.
Other aid groups using Cyprus banks to filter aid to Middle East and south Asian refugees had no comment.