Crimea, Russia and Cyprus

by George Hatjoullis

Russia has annexed Crimea. This is a fait accompli that even war will not change. Russia will commit to retaining Crimea at any cost. It is an unpalatable fact to Ukraine and the West but it remains a fact. Putin made clear the obvious in his speech. Russia cannot tolerate a potential NATO presence in Crimea. The Russian annexation of Crimea may be illegal under international law and the bastions of international law may seek to punish Russia for this breach. However, the goods will not be returned. Sanctions are thus punitive rather than effective (in returning Crimea). They also punish the sanctioner as well as the sanctioned and as such can only go so far in the short-term.

The more pressing issue is whether Russia will make further incursions into Ukraine’s territory. Putin stated that Russia has no designs on more territory. However, one cannot simply take his word. Moreover, ethnic Russians in Ukraine may feel emboldened to assert their ethnicity. The risk of violence could create a situation in which Russia might feel compelled to make further incursions. There are elements in Ukraine that might seek this. The Ukraine cannot hope to compete with Russian military force alone. The only force capable of helping Ukraine is NATO. It is unlikely that NATO will risk being drawn directly into conflict with the Russian Federation. The only situation where this might become a remote possibility is if Russia and Ukraine move to war. There are elements in Ukraine that might seek to provoke such an event, even if Russia does not seek it, in order to suck NATO in. The risk of war remains ever present.

Cyprus figures prominently in this scenario for several reasons. First, it is a clear example of the illegality of Russia’s action. There are parallels with the illegal occupation of the north of Cyprus after the Turkish invasion of July 20, 1974. The northern part of Cyprus has been de facto annexed by Turkey and colonised through settlement by ethnic Turks. Turkey was and is a NATO ally. Turkey has never been sanctioned for the invasion. Second, there is the Cyprus bank bail-in that took place this time last year (and was the reason I began this blog). Cyprus got itself into financial difficulties much like various other eurozone countries. However, it was treated much more harshly than these countries because of the alleged presence of large deposits of illegal Russian and Serbian funds. The Russian connection cost Cyprus dear in 2013. Arguably, it was the same connection that cost Cyprus dear in 1974. The existence of AKEL, the Cyprus communist party (still the largest single party in Cyprus), at the time of the cold war was instrumental in the events that led to the invasion. The fact that AKEL was openly pro-Moscow and, somewhat incongruously, consistently supported the larger-than-life Archbishop Makarios as President of the Republic, was not irrelevant to the facts of the invasion.

Today, as punitive sanctions against Russia are contemplated, Cyprus finds the Russian connection may again be problematic. Cyprus has good relations with Russia, not for ideological reasons, but rather because the Cyprus banking and business services sector is a major conduit for Russian foreign investment. It is likely that punitive sanctions will complicate life in Cyprus even further and present quite a dilemma for the europhile administration. Good relations with Russia are valued by the wider population not simply for commercial reasons. There is a religious connection through the Orthodox Church. More important however Russia is perceived as a potential bulwark against further incursions by Turkey. It is a tangled web.