Cyprus is paradise lost for Russian settlers

Most incomers far from being oligarchs

Women withdraw money from ATMs at a branch of the Bank of Cyprus at Eleftheria square in Nicosia late last month. Major depositors in Cyprus's biggest bank will lose around 60 percent of savings over €100,000, its central bank confirmed on Saturday.

Women withdraw money from ATMs at a branch of the Bank of Cyprus at Eleftheria square in Nicosia late last month. Major depositors in Cyprus's biggest bank will lose around 60 percent of savings over €100,000, its central bank confirmed on Saturday.


Paradise Lost is the tale of Russians in Cyprus. “Russians” – Russian speakers, not necessarily Russian nationals – brought money, acumen, skills and hard work to Cyprus because the island had a well-ordered business sector, the rule of law, safe banks and a vibrant economy.

The island’s attributes of sun, sea, hospitality and a relaxed lifestyle drew citizens from the old Soviet Union to settle, as their home countries had none of these man-made and natural advantages.

The majority are not oligarchs depositing untaxed or dirty money in Cypriot banks but business folk escaping transitional turbulence in their homelands.

Over the past two weeks, many of the 50,000 Russians living here – out of 170,000 foreigners, 106,000 of them EU nationals – have realised that sun, sea and a warm welcome are not enough, particularly since Cyprus is no longer an inexpensive place to live with low taxes and reliable banks.

Over coffee and sweets at a vast empty cafe in the sunny fishing port of Ziyi, two “Russian” businessmen tell their stories.

A solid man with closely cropped hair and muscled arms, Alexey Mazmanov is a contractor who hails from the north Caucasus. “After serving in the Russian army, I came on holiday as a tourist and fell in love with the atmosphere and Cypriot hospitality. Because I have Greek roots, I applied for Greek citizenship so I could live and work here.”

Hotel builder
“I began as a casual labourer on construction sites and then I started step-by-step with repairs and painting, working up to renovations and building. I brought together Russian-speaking customers with Greek-speaking companies. I did many major renovations and built, as a subcontractor, parts of two hotels in Paphos and Aya Nappa.

“Five years ago, I built a school in Paphos. At that time I had 120 employees – Russians, Poles, Ukrainians, Greeks – now I have six. I have only one project left. That’s it. When this is over, I will leave my family [his wife, three daughters and parents] here until I have set up a new base in Russia. ”

He has a house and seven flats in Paphos, a major tourist resort, but only one flat is taken – by a friend who cannot pay.

“Personally I have not been harmed by the bank crisis but that and the economic collapse have killed my possibility to live in Cyprus. I have to leave this paradise island to earn money to feed my family.”

Alexey blames European politicians for conducting “experiments in Cyprus. Europe could have helped a small community like Cyprus without big sacrifices.” He fears there will be further experiments in Ireland, Malta and Slovenia.

Ukraine-born Alex Shushkovsky is a petroleum engineer who trained at the University of Odessa. In 1988, he moved to Canada to work for a major multinational oilfield services firm and was sent to Cyprus to co-ordinate the company’s east European business. He left to establish his own firm in Russia where he employs 40 people making pumps to lift oil and water from the depths of the earth, 2.5 km down.

“I employ no one in Cyprus,” says Alex, a curly grey-haired man with the chiselled profile of a young Roman emperor. “The crisis in Cyprus has done nothing to my business but I have to move my company to some place else. Its money is stuck [frozen in a viable bank rather than Laiki Bank, due to be wound-down, or the restructured Bank of Cyprus].

“I hope this will not be for a long period. I have not lost much on haircuts. My wife, who is Russian, is on my account. My daughter 16½ was born in Cyprus. We all have Canadian citizenship.

“I own my house, I built it myself” – it is near the Meridien Hotel on the waterfront in Limassol. “I’ve been thinking about where to go and have in mind a few places. It depends on where my daughter goes to study. If she goes to the US or Canada, we could settle in Florida or Vancouver; if to Europe, Switzerland or Italy.”

He, too, is critical of the handling of the situation by the Eurogroup and the government. The Europeans should not have targeted “all of Cyprus to get a few oligarchs. Their accounts can be investigated and they can be taken to court” if they have committed offences.

“The banking situation was not that bad but the worst [scenario] was presented to us – both Cypriots and foreigners – overnight when they closed down the banks and committed bank robbery. Now everybody wants to take their money out. Only mentally disturbed people will bring money to Cyprus for at least two years.”

Russian exodus
To promote confidence, the government “needs to lift restrictions on cash immediately” so business can function: “The government must help us all, it must stop giving priority to collecting taxes and help the people.” He believes many Russians will go.

Nevertheless, 300 businessmen are gathering in Limassol at the annual Global Russia Business Meeting this weekend to discuss investment. Two figures attending are the chairmen of the Gaz Group, Russia’s heavy vehicle manufacturer, and the Bank of Moscow. The event will be addressed by Cyprus president Nikos Anastasiades.