Moscow on the Med: An Informed Response
Dear Sir, Madam,
As a longtime resident and visitor to Cyprus, I was hard-pressed to find a sense of objective reality in Michael Peel's article "Moscow on the Med" in the Financial Times Life & Arts.
If it were objective, the article would have started from the fact that the Russian government has last month proposed amending the double tax treaty between Russia and Cyprus to tax dividends repatriated from Russia to Cyprus at 15%. Hardly "Moscow on the Med." It would also have mentioned that there are objective reasons why Cyprus should enjoy close relations with Russia: in addition to the Russian corporate investment in Cyprus (and vice versa due to legal round-tripping of capital), there are over 40,000 Russians living in Cyprus and making a real contribution to the economy. They are mostly middle class people earning a middle class living. Hardly the kind of glitz the article makes them out to be. They also make real investments in Cyprus: a leading internet service provider and one of the largest photovoltaic energy producers are owned by Russians, living in Cyprus, operating according to Cypriot law. One of the leading hotels in Limassol has just been bought and totally renovated by a Russian living in Cyprus. We should remember that EU "solidarity" after the 2013 banking crisis in Cyprus amounted to changing normal operations until then and requiring a depositor bail-in, leading to the liquidation of the second-largest bank on the island. That "solution" was not tried before in the cases of Greece, Spain, Portugal or Ireland, and has not been tried since. It has not gone unnoticed that there is one law for larger countries, and one for the small. Together with the fact that the European Union recognises an accession country, Turkey, which is in military occupation of the northern part of Cyprus, and is currently engaging in illegal exploration in Cypriot territorial waters, should tell you all you need to know about why many Cypriots distrust the EU. The article mentions "two large British military bases" in Cyprus. In fact, these are sovereign UK areas that account for 98 square miles of prime land, or about 3% of total land area of Cyprus. There are also likely to be far more British expats living in Cyprus that Russians. And far more Cypriots living in the UK. Strange the article was not labelled "Manchester on the Med" or something equally pithy. Finally, Mr Peel neglects to mention that decisions such as tax, double taxation treaties, or citizenship thankfully remain the exclusive domain of national governments in the European Union. The European Commission can publish as many papers as it wants, but it has no jurisdiction on the citizenship requirements of EU Member States. Not yet. Yes, there is a strong Russian presence in Cyprus. That does not make it illegal, nor sinister. Much of this presence predates the unfortunate events of 2014 and the worsening in relations between Russia and the West that this has led to.
One would have expected a much more fair and balanced viewpoint from the Financial Times. One hopes in vain.