Families: Russia owes us €100bn

DESCENDANTS of French families who were financially ruined when their investments were erased after the Russian Revolution want to seize a cathedral in a battle over a €100bn debt.

The debt, roughly three-times Russia's annual defence budget, comes from Russian government bonds issued to their French ancestors which were erased by the Bolsheviks after the Russian Revolution.

A court in France earlier this year recognised Russia as the rightful owners of the Orthodox Cathedral in Nice, legally linking the current Russian government to that of Tsar Nicholas II, who funded the cathedral in 1912.

The president of Afiper, which represents more than one thousand "tsar bond" holders, Eric Sanitas said: "It's shocking that when Russia owes money from the tsar-era we should forget about it, but when they want to claim property that belonged to the tsar we mustn't forget that.

"The fact Russia came to France demanding the tsar’s property surprised us. Before, every time we tried to negotiate they said ‘it's a really old debt, a debt of the tsars, another period, we should forget about it now," he added.

The remaining bonds are worth about €37 billion, but with the interest accrued over 80 years, the debt could rise to €100 billion.

Each bond was issued by Russia before 1917 with a value of 500 gold francs - a currency that still has a value on the Paris Bourse, currently €3,700 per bond.

A survey in the 1990s found that 10 million bonds still existed among an estimated 316,000 holders. Afiper, the largest holders’ association, has 1,625 members with about half a million bonds worth €1.85 billion.

After the Russian Revolution, leader Vladimir Lenin said the new regime did not recognise the debts of the tsar.

The French government dropped their claim in a $400 million settlement in 1996 where some bond holders accepted €50 per bond. France has said individual holders seeking further reimbursement must do so alone.

Afiper is taking legal advice over a claim on the Nice cathedral - a listed historic monument containing many valuable icons.

However any action to seize it would have to await the outcome of an appeal by a Nice cultural association which also lays claim to the property.

Another possibility is making a claim for the Météo France building in Paris that was recently sold to Russia for a reported €60m by France, Mr Sanitas said.

He added: "Russia is clever at not paying debts - when someone wants to seize property it is always claimed it does not belong to Russia - a military school ship was said to belong to the University of Murmansk; in another case the Russian Central Bank was said not to be 'Russia' either.

"However in this case it was 'Russia' that went to court to ask for the cathedral and was given it. That's why we find the case really interesting."