HUNDREDS of Western-trained Cypriot lawyers and accountants earn a living from handling the affairs of Russian and Ukrainian offshore companies. The relationship has flourished since the island became a base for proto-capitalists from the former Soviet Union in the 1990s, thanks to a communist-era treaty on removing double taxation. A relaxed attitude to transactions involving cash-filled suitcases also helped.
Nicosia, the island’s capital, and Limassol, its largest port, are these days home to an estimated 50,000-60,000 former citizens of the old Soviet Union’s constituent countries. Limassol’s once-seedy waterfront now boasts smart blocks of flats, shopping malls and a gleaming marina for the billionaires’ superyachts. A bust of Alexander Pushkin, a 19th-century Russian poet, graces a seaside park. The wealthiest Russian and Ukrainian families flit between homes in Cyprus, London and Paris.
Although Russians are generally popular with Greek Cypriots as fellow members of the Eastern Orthodox church, a new political party launched in September by two Russians holding Cypriot passports is raising eyebrows. An estimated 25,000 ex-Soviet citizens with Cypriot nationality will be eligible to vote in a presidential election next February. The two founders (and main backers) of “Ego o Politis” (“I the Citizen”), an entrepreneur (who, somewhat inconveniently, cannot speak either Greek or English) and the co-founder of an online war-gaming company, dismiss fears that their new party will promote Russian interests. EoP’s priorities are to fight graft and shrink the island’s bloated bureaucracy, says Yiorgos Kountouris, a St Petersburg-trained orchestral conductor who is the party’s vice-president. “Corruption is out of control, and education and culture here are at a very low level,” he adds. “Our potential voters are Cypriots from anywhere who are dissatisfied with the old politicians.”
EoP does not plan to field a candidate against Nicos Anastasiades, the centre-right incumbent expected to run for a second term. But its leaders are already talking to the established political parties with a view to backing one of the contenders in the run-off vote. EoP’s support might even tip the balance in a race expected to be close.
Some islanders fret that despite its declared platform, EoP’s emergence heralds yet more Russian interventions in Cypriot public life. The government is still paying back a €2.5bn ($3.5bn) emergency loan granted by Moscow in 2011. One Cypriot legal expert, for instance, bemoans the problem of reiderstvo (corporate raiding), whereby Russian offshore companies illegally change ownership after a local lawyer presents forged documents to the island’s company registrar. The practice is “not uncommon,” he says, but the Cypriot authorities have yet to bring a single case of reiderstvo to court.
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