HUNDREDS of Western-trained Cypriot lawyers and accountants earn a living by 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 citizens of the former Soviet Union. Limassol’s once-seedy waterfront boasts smart blocks of flats, shopping malls and a gleaming marina for the billionaires’ superyachts. The wealthiest Russian and Ukrainian families flit between Cyprus, London and Paris.
Although Russians are popular with Greek Cypriots as fellow members of the Eastern Orthodox church, a new party launched in September by two Russians holding Cypriot passports is raising eyebrows. Some 25,000 ex-Soviet citizens will be eligible to vote in a presidential election next February. The two founders (and main backers) of Ego o Politis (I the Citizen), a restauranteur and investor (who, somewhat inconveniently, cannot speak either Greek or English), and the co-founder of an online war-gaming company, dismiss suggestions that it 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.”
Some islanders fret that despite its declared platform, EoP’s emergence heralds yet more Russian intervention in Cypriot public life. The government is still paying back a €2.5bn ($3.5bn) emergency loan granted by Russia in 2011. One Cypriot legal expert 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.