  We present results of the XMM-Newton observation on the bright X-ray binary
Cyg X-2. In our analysis we focus upon the absorption and scattering of the
X-ray emission by interstellar dust. The scattering halo around Cyg X-2,
observed with the CCD detector EPIC-pn, is well detected up to ~7 arcmin and
contributes ~5-7% to the total source emission at 1 keV, depending on the dust
size distribution model considered. For the first time spatially resolved
spectroscopy of a scattering halo is performed. In the halo spectrum we clearly
detect the signature of the interstellar dust elements: O, Mg, and Si. The
spectral modeling of the halo shows a major contribution of silicates (olivine
and pyroxene). The spatial analysis of the halo shows that the dust is smoothly
distributed toward Cyg X-2 at least for ~60% of the path to the source. Within
the instrumental limits, the data do not show preference for a specific dust
size distribution; namely the Mathis, Rumpl & Nordsieck (1977) or the
Weingartner & Draine (2001) model. We used the Mie theory to compute the
differential scattering cross section. The RGS data were used to investigate
the ISM absorption, in particular the region of the oxygen edge. Combining the
RGS results with the information on dust grains provided by the EPIC-pn
spectrum of the halo we estimate a column density for dust absorption by
oxygen, provided that it is locked in silicate grains (abridged).
