Ukraine and the Cyprus Bailout: Time to Find a New Haven for Direct Foreign Investments?
Islands are typically susceptible to various natural disasters, and over the centuries island dwellers have developed various means to cope with all sorts of calamities.  But the shockwaves from the Eurozone crisis may have been more than most of the 860,000 inhabitants of the island of Cyprus — as well as the vast majority of the nearly 320,000 companies registered there — could have anticipated or done much to prepare for.  
For weeks now many have watched events unfold in Cyprus as the country reached out for a lifeline in the form of a bailout by the Eurogroup.  But perhaps — other than the Cypriots themselves — none were as nervous as Russian and Ukrainian businesses.  Estimates placed Russian deposits in Cypriot banks at over $30 billion, with estimates of Ukrainian deposits varying from as low as $1 billion to as high as $25 billion. 
The announcement of the bailout may mean that those businesses, not prescient enough to join the other holders of just over $900 million in deposits withdrawn from the Cypriot banking system in the days leading up to the announcement, may ultimately face significant losses.  But will this be enough to end this island's appeal as an offshore financial center for Ukrainian businesses?  Or will Ukrainian businesses as well as other international investors continue to utilize Cyprus as a base from which to invest into, and take profits out of, Ukraine?
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