Dimitri A. Sotiropoulos
Cyprus had operated as the gateway for Russian businesses to the EU for over a decade. However, the EU has now intervened to constrain Russian investment in the island. The outbreak of the Ukrainian crisis has also led Cypriot parties to move away from any Russian influence.
To understand Russia’s current influence over Cypriot politics and parties, the relations between the two countries must be placed in a historical perspective. This is because of the religious affinities between the two nations; the post-war alienation of Cyprus from the West; and Russia’s economic involvement in Cyprus after the latter joined the EU in 2004. Since then, such involvement has been so large in the relatively small East Mediterranean island (population of 1,360,000 including inhabitants of territories under the Turkish occupation and 935 000 only in the area controlled by the government of the Republic of Cyprus) as to prompt the Cypriot investigative journalist Makarios Drousiotis to publish a book titled Putin’s Island. Today, however, three years after Russia’s invasion of Ukraine, Russian-Cypriot relations have cooled down. This is due to the EU’s pressure on Cyprus and the convergence of Cypriot political parties towards rejecting Russia’s invasion.
Cypriot-Russian relations before the start of the Ukrainian war
Τhe long-term relations between the Russians and Cypriots go back to the period when the island was a British colony (1878-1960). The USSR had supported the anti-colonial uprising of Greek Cypriots against the British until the island gained its national independence in 1960. Thereafter, the Soviets were satisfied that Cyprus was starting to take a leading role in the Non-Aligned Movement (NAM) of countries that distanced themselves from the West. Cultural relations between Russia and Cyprus have always been strong, as Greek Cypriots, like Russians, are Orthodox Christians. In fact, a new Russian Orthodox church was consecrated by Russian and Cypriot church leaders as recently as in May 2024 in Limassol, Cyprus’s second largest city.
After Turkey invaded Cyprus in 1974, the USSR supported Cyprus in international fora without actively seeking a solution to the Cyprus problem. The same position was held by post-Soviet Russia, which backed UN resolutions for the removal of Turkish troops from the island. However, the Kremlin rarely interfered in a problem that periodically ignited tensions between the two NATO allies of Turkey and Greece.
Russia’s lukewarm support for their cause became obvious to Cypriots. In a 2024 local survey on which foreign power has the most significant role in resolving the Cyprus question, and which is the best ally for the defense of Cyprus, Cypriots ranked Russia – along with the United Kingdom – among the least relevant powers, with the best allies being Greece and the EU.
Cypriot-Russian economic ties
Yet, until the war in Ukraine broke out, Cyprus had benefited from economic ties with Russia. After the collapse of state socialism in the USSR, Russian businessmen deposited their funds in Cypriot banks and invested in the island. In the meantime the country became a popular destination for Russian tourists too. The International Consortium of Investigative Journalists (ICIJ) claims that in the first two decades of the 21st century Russians invested roughly $200 billion Euros in Cyprus. That was a disproportionate investment in the small-sized Cypriot economy (a nominal GDP of almost 35 billion USD in 2024, data for the area controlled by the government of the Republic of Cyprus) which, notably, had an oversized banking sector.
Cyprus gradually became a launch pad for Russian financial endeavors in the West and particularly so in the EU, especially after the accession of Cyprus in 2004. For instance, a “golden passport” programme, launched by Cyprus in 2007, and ended by the EU in 2020, allowed thousands of wealthy Russians to acquire EU citizenship through Cyprus.
The possibility of paying to obtain EU citizenship was just one of the attractions drawing Russian businessmen to Cyprus. They were also lured by attractive tax regulations and Cyprus’ status as a Eurozone member state in 2008. A paradox therefore emerged. The Cypriot FDI inflow into Russia used to be so large as to make Cyprus the third largest investor in the country in 2009. Βut in fact there were no such large Cypriot investors. This was all Russian capital flowing back from the island into Russia.
Moreover, the EU took action to reduce the exposure of Cyprus to Russian deposits before the full-scale aggression against Ukraine. This is because Cyprus had undergone a huge economic crisis in 2013. The EU intervened with the Cypriot authorities in the 2010s to restrict the granting of Cypriot, i.e., EU passports, to Russian citizens. Eventually, when Cyprus converged with the rest of EU member states in condemning Russia’s invasion of Ukraine in February 2022, the unwinding of economic ties between Russia and Cyprus became full-scale itself.
The meager direct influence of Russia on the Cypriot political party system
In Cyprus, a presidential democracy embedded in a bipolar political system, the two largest parties are Democratic Rally (DISY) on the centre right and the Progressive Party of Working People (AKEL), a former communist party, on the centre left. There is also a smaller centre-right party known as the Democratic Party (DIKO), as well as the far-right National People’s Front (ELAM).
Both DISY and DIKO condemned the invasion of Ukraine by Russia and the annexation of eastern Ukrainian territories by Moscow. The same holds true for AKEL. However, the party noted that before the invasion there were infringements of human rights in the Russian-speaking communities of eastern Ukraine. In contrast to the governing DISY, AKEL criticized the EU’s supply of weapons to Ukraine. This position may have been a knee-jerk reaction reflecting the party’s communist historical legacy.
In contrast to many other far-right parties in Europe, the ELAM party condemned Russia over the Ukraine war. This is expected from any party in a country like Cyprus, which was itself invaded 50 years ago by Turkey. ELAM’s leader Christos Christou agreed with sanctions against Russia as an invading country, stressing at the same time that sanctions should be imposed on Turkey too for having invaded Cyprus in 1974. He added that nevertheless the war in Ukraine affected negatively his country’s economy, as Russian businesses in Cyprus started to leave the country. In brief, while AKEL and ELAM have some reservations about EU sanctions, most Cypriot political parties endorsed the bloc’s policy regarding the war.
The divisions among political parties regarding their reactions to the Russian invasion were also reflected in a local survey conducted by the state-run Radio Television Foundation (RIK) in October 2022. The majority (almost 55% of respondents) approved of Cyprus’ condemnation of the Russian invasion. However, only one third of the respondents agreed that Cyprus should impose EU-led sanctions on Russia, while a mere 8% agreed with sending weapons to Ukraine. This approach has not changed substantially since then, making Cyprus the least pro-Ukrainian society in the EU.
The indirect influence of Russia on Cypriot politics
While there may be no direct impact of Russia on Cypriot democracy, there may be unseen currents of influence over Cypriot domestic politics. Given the relatively small scale of Cypriot society and the role played by its largest political parties when in government regarding state finances and public administration, it is probable that there is an indirect Russian influence across Cypriot political parties too.
Banks, law offices and financial firms in Cyprus’ services sector prospered due to the influx of Russian business. Such firms helped Russians open accounts, transfer funds, establish businesses and navigate the meanders of EU and Cypriot legislation. The firms also helped Russian oligarchs to evade Western sanctions placed on business associates of Vladimir Putin. The leading politicians of the Cypriot political parties managed law firms, which were staffed by their family members, in Nicosia and Limassol.
Μoreover, as it is well known, there is a division on the island of Cyprus between the southern part, the Republic of Cyprus, and the northern part, that is the self-proclaimed Turkish Republic of Northern Cyprus. The latter is recognized only by Turkey. Thus, in the north there is a grey zone, facilitating illicit business transactions.
Today, Russian influence, whether economic and otherwise, is still visible in Cyprus. This is particularly true in the city of Limassol, where there are Russian businesses as well as Russian schools and churches. As Cyprus has faced pressures from the EU, the Russian population in Limassol is reported to have dropped from 120,000 to 50,000, while there are far fewer Russian clients in Cypriot banks than in the past. Nevertheless, the Russian population in the Republic of Cyprus is still proportionally one of the largest in the EU.
Always look on the bright side
The long-term political and cultural relations between Russia and Cyprus and the relaxed attitude of Cypriot authorities regarding the influx of Russian capital into Cyprus since the beginning of the 21st century have all helped to create the impression of a Russian overtake of both the economy and polity of Cyprus.
It is probable that there were indirect Russian influences on the Cypriot political system. This is owed to the very close links enjoyed by Cypriot political elites; the service sector of the economy of Cyprus (banks and law offices); and the propensity of Russian capital to use Cyprus as an outlet, if not a gateway, for the EU.
Given the large scale of Russian involvement in Cyprus’ small-scale economy and above-mentioned “familial” character of the political system in the first two decades of this century, it is irrational to think that political parties, the main protagonists of the system, remained alien to Russian interests. However, there is no evidence of such institutional relations either.
Whatever personal relations existed between the Cypriot politicians and the Russian intermediaries, they must have been curtailed by now. In the early 2020s the EU stepped in to control both the naturalization of wealthy Russian citizens by the Cypriot authorities and overall Russian financial activities in Cyprus. The EU intervened after it became evident that Russian businessmen had benefited from legal loopholes. The Cypriot government has toed the EU line ever since, including its convergence with the rest of the bloc on Russia’s invasion of Ukraine. In effect, this has helped to defend the Cypriot democracy from Russian interference.
Dimitri A. Sotiropoulos is professor of political science at the National and Kapodistrian University of Athens.
Edited by Adam Balcer
