According to the article of Elena Holodny published in Business Insider under the headline ‘Russia is reportedly getting military bases in an EU state’, Greek Cypriot side has offered Russia to have air and navy bases on its territory.
The article states that the Greek Cypriot leader Nicos Anastasiades announced that the country is ready to host Russian aviation and naval bases, and the official agreement on military cooperation between the two nations is expected be signed on February 25, 2015, according to Lenta.ru. The article continues as: “There is an old [defense] agreement, which should be renewed as is. At the same time, some additional services will be provided in the same way as we do with other countries, such as, for example, with France and Germany,” Nicos Anastasiades said. “Cyprus and Russia have traditionally had good relations, and this is not subject to change.”
It has also been mentioned in the article that the Greek Cypriot side’s announcement comes after Russia expressed interest in having a military base in South Cyprus in late January, according to the Global Post and Greek Reporter. Notably, South Cyprus is one of the 28-member states in the EU, which have been imposing sanctions on Russia over the past year in response to the actions in Ukraine. And just like Greece has recently caused a stir by complicating the process of extending sanctions on Russia, South Cyprus, too, just voiced some opposition to the additional sanctions on Russia, adding that many EU members share that opinion.
“We want to avoid further deterioration of relations between Russia and the European Union,” leader of the Greek Cypriot side reportedly said. So military cooperation between South Cyprus and Russia is yet another red flag for the EU.
Article also noted : “Presumably, the Russian Air Force will use the airbase “Andreas Papandreou,” along with the international airport of Paphos in the southwest of the island, approximately 50 kilometers from the air base of the British Royal Air Force “Akrotiri.” Additionally, the Russian navy will be able to permanently use the base of Limassol, according to Lenta.Ru.
“The Limassol port borders on the British air base of Akrotiri which serves NATO operations and is also an important hub in the electronic military surveillance system of the alliance,” according to the Global Post. Given Russia and South Cyprus’ shady economic relationship over the last two decades (ever since the fall of the USSR), perhaps this isn’t all that surprising. Russia Today reports that “Russians have transferred over $30 billion (around $1 trillion roubles) to South Cyprus over the past twenty years, according to a study published by a group of economists from Russia, Finland and Canada.”
According to the article, in 2013, during the South Cyprus financial crisis, analysts estimated that over a third of bank deposits in South Cyprus may have had Russian origin, and reportedly, many Russian companies are registered on the island. Some reports even went as far as saying that South Cyprus has become “a major money laundering machine for Russian criminals” back in 2013. Even today, Russia’s current economic problems are reportedly further dragging down South Cyprus.
According to the article, “Russia’s presence in the economy has been a huge supporting factor. Its footprint is everywhere from tourism to real estate, so it is worth monitoring the impact,” said Michael Florentiades, chief economist and head of investment research at XM.com, an online financial services company in Limassol.
The article recorded that naturally, Russia’s heavy-duty financial involvement in a EU state “raised concerns among the island country’s Western allies” over the past few years, according to Euractiv. But the most alarming Russia-South Cyprus dalliance came during the height of the South Cyprus financial crisis when South Cyprus was reportedly negotiating with Russia for a bailout in 2013. The EU was particularly nervous about this because there was speculation that Russia might ask for a naval port and access to the country’s gas reserves in return.
Finally the article mentions that ultimately the South Cyprus opted for a “€10 billion bailout agreed with the troika, in return for closing the country’s second largest bank Laiki, and imposing a one-time levy on all uninsured deposits, including those held by foreign citizens.”