British magazine The
Economist
published
article “The war in Ukraine has shaken both sides of Cyprus” with the subtitle “Both Russians and Ukrainians used the island as a banking haven: now it’s not so simple.”
— In an alley off a busy street on the Turkish northern side of Cyprus's divided capital, Nicosia, sits a shabby building. From the slightly open door you can see dirty wiring sticking out of the wall. On both sides are glued two white paper signs with coats of arms: one in Cyrillic, the other in Turkish. This, oddly enough, is the Russian consulate, so the report begins.
According to the publication, this is “part of a new type of Russian invasion.” Mete Hatay, a demographer from Nicosia, estimates that about 20,000 Russians and Ukrainians live in the Turkish part of the divided island. Some Russian citizens moved there from the Republic of Cyprus after Western sanctions were imposed on Russia for its invasion of Ukraine in 2022. Others arrived from Russia via Istanbul.
Since the early 1990s, wealthy Russians have flocked to the internationally recognized Republic of Cyprus, which has become a popular tax haven. Limassol, the second largest city on the island, is nicknamed Limassolgrad. The Golden Passport Scheme, which closed on November 1, 2020, has strengthened ties between Russia and Cyprus. Technically, Cyprus was the largest foreign investor in Russia.
The war in Ukraine disrupted this idyll. As a country that has been illegally invaded by Turkey, Cyprus and its banks simply have no choice but to comply with Western sanctions against Russia, says Theodoros Gotsis, deputy head of the security policy department of the Ministry of Foreign Affairs of the Republic of Cyprus.
There are more Russians in the Turkish-occupied north of the island than Ukrainians. Ksenia Mukhortova, president of the Ukraine-Cyprus Friendship Society, notes that Ukrainians generally do not travel north because it would be like going to Crimea, which was captured by Russia in 2014.
Despite the loss of Russian tourists and businesses, the Cypriot economy has been lucky, says Fiona Mullen, director of the consulting company Sapienta Economics. According to her, “Cyprus has a whole bunch of Lebanese and Israeli clients who want to do business in a safe place.” Since October 7, 2023, a stream of Israelis has poured into Cyprus. The chaos in Lebanon has caused a new influx of relocants.
Cyprus has long benefited from the disaster in the Middle East, becoming a refuge for the rich who want to wait out the conflict, says Professor Hubert Faustmann, who teaches history and political science at the University of Nicosia. How long will Cyprus be lucky?
Photo: Cyprus News Agency
!!!
— Subscribe to the “Europe-Cyprus” pages in
,
,
,
VKontakte
and to the channel in
Telegram
