Not that Russia didn’t try, mind you.  Gazprom attempted an eleventh-hour white knight proposal that would have recapitalized Cyprus’ teetering banking system and allowed depositors to remain whole, but would have grabbed the natural-gas rights of the island in return.  Instead, Cyprus used that last remaining leverage to protect the guaranteed depositors, while delivering a big blow to large depositors who took advantage of Cyprus’ lax regulations.  Russia has now told those Russians in that group that they have no intention of cushioning the blow:

The Russian government says it will not compensate Russian savers who have lost money in the Cyprus banking crisis.

Russians are believed to have billions of euros in Cypriot accounts and deposits above 100,000 euros (£84,300; $128,200) in the two biggest banks could be reduced by as much as 60%.

Such losses would be “a great shame”, First Deputy PM Igor Shuvalov said, “but the Russian government won’t take any action in that situation”.

The only exception to that will be where the depositors are — ahem — partners to the Russian government:

Speaking on the Russian state TV channel Rossiya 1, Mr Shuvalov said Russian money in Cyprus included some that had been taxed and some that had not.

He said the Russian government would still look at cases where there were “serious losses, involving companies in which the Russian state is a shareholder”. That review would take place in Russia, and “for this it would certainly not be necessary to help the Republic of Cyprus”, he said.

The message? Bring us in on your little venture and we’ll offer you … protection.  The only difference between that and the kind of business Paul Cicero did in Goodfellas is that the Russian government probably does fewer bust-outs.

The news got worse over the weekend for the big depositors.  At first, the assumption was that they might lose 30-40% of their assets above the guarantee level of €100,000.  Now it’s looking more like 60%:

Depositors in Cyprus with savings of more than 100,000 euros ($128,000) could face losses of up to 60 percent, under tough conditions attached to an international bailout, Finance Minister Michalis Sarris said Saturday.

The deal would force large depositors at the country’s two largest lenders – Bank of Cyprus and Laiki – to take heavy losses, while smaller deposits would be guaranteed.

A mandatory one-off tax on deposits of more than 100,000 euros in return for shares in Bank of Cyprus would bring a 37.5 percent decrease in value.

Depositors could also lose an additional 22.5 percent, Sarris told RIK state television, if it is determined that more funds are needed to save the bank.

And what if that’s not enough?  Let’s just say that all your deposits are now belong to us.  If you are wondering what this is doing for the reputation of the euro, let’s also just say that it’s becoming as popular as a steak sandwich at a PETA rally:

Countries in the developing world are drastically reducing their euro holdings as economic instability in Europe leads them elsewhere to stock their currency reserves. Euro holdings are at their lowest level in a decade, according to the International Monetary Fund.

When the euro was first launched on Jan. 1, 1999, there were hopes in Europe that it might soon rival the US dollar as the world’s premier reserve currency. And initially, it seemed that dream was not unrealistic, as countries around the world began filling their coffers with the European common currency.

Now it looks as though that trend is beginning to reverse, though. Following years of crisis, developing countries are beginning to look elsewhere for their reserve currency needs — and have spent the last year and a half shedding euros.

That is the message to be gleaned from the latest installment of the regular International Monetary Fund report on currency reserves held by countries around the world. According to the report, developing economies shed some $45 billion worth of euros in 2012 and have sold close to $90 billion worth of euros since the second quarter of 2011.

The numbers seem to indicate that the ongoing euro crisis, fueled by high sovereign debt loads in several countries belonging to the common currency union, has eroded global confidence in the euro. During the same period, US dollar holdings among developing economies have continued to rise.

That’s not a compliment to the dollar, but merely a statement on the lack of solid options in the marketplace now.