THE blowback on Cyprus from full-blown EU economic sanctions on Russia would be extremely severe, President Nicos Anastasiades has said.
In an interview with leading German business newspaper Handelsblatt, Anastasiades said Cyprus, still reeling under austerity and a credit squeeze, stands to lose a great deal should the European Union as a whole escalate an economic standoff with Russia over the Ukraine crisis.
The progress achieved by Cyprus so far in its adjustment programme would be jeopardised, the President said.
Noting that Nicosia is in principle not against EU sanctions on Russia, Anastasiades said a study is needed to determine the impact of sanctions on individual EU member states.
Anastasiades said Cyprus was concerned over Russian President Vladimir Putin’s calls for ‘deoffshorization’ – where Russian companies would leave their offshore assets and move their business activities back to home soil.
Despite this, to date, no flight of Russian capital from Cyprus has been noted, he added.
In addition to Russian money in Cyprus, Nicosia worries that a possible devaluation of the rouble against the euro due to the Ukraine crisis would keep away the masses of Russian tourists descending on the island each year.
In the same interview, Anastasiades spoke of Cyprus’ potential role in weaning Europe off Russia’s natural gas.