Could the crisis over a bailout for Cyprus end with the Cypriot and Russian governments establishing a much closer political and security relationship?
Several experts see the crisis over Cypriot debt as a moment that will drive the Cyprus-Russia relationship in one of two directions. “You could see a major downgrading of the relationship if the EU gets its way, and Russian companies conclude the island is no longer a convenient, secure offshore centre”, says Nicholas Redman, of the London-based International Institute for Strategic Studies. “Or you could see a Russian bailout leading to a significant strengthening of the economic relationship and of Russian diplomatic influence.”
If Russia were to provide a large rescue package, or if Cyprus was to plunge out of the eurozone, diplomats would certainly begin to ponder the diplomatic consequences.
Russia will also be driven by its commercial interests, say many analysts, with an eye on Cyprus’s offshore oil and gasfields, even if the value of these fields is uncertain. “People are already reflecting on the potential implication of Russia having much greater influence over the governance of an EU Member State, and what it means for security interests in the region”, says a senior western official.
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