Sergei Glazyev implies Cyprus would be better off in the Eurasian Union

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Sergei Glazyev, Vladimir Putin’s adviser, implied that Cyprus would be eligible to a Russian loan if it was a member of the Eurasian Union. In fact, we do not think that the word “imply” is appropriate in this situations. His statement sounded more like a proposal. Was it actually suggested to the Cyprus’s finance Minister to exit the European Union and enter Russia’s Eurasian Union? Could that be the reason why Moscow is so reluctant to help Cyprus this time? Even more importantly though, is Moscow ready to handle the turbulent Geostrategy of the locus where the SE Mediterranean and the Middle East converge?

The presidential adviser started off by stating what DefenseHorizon and Focus Dynamics Research Center had actually suggested from the beginning, the procedure of the de-offshorization, or as we had put it:

We do not wish to take position regarding Eurogroup’s decision, we are just analyzing it and we can see that indeed it is serving both European and Russian interests, in spite of the Russian “nagging” that numerous businesses will be destroyed, yes maybe they will, but what matters is the repatriation of the capital and the purge of those who evaded taxes. Not to mention the strike against the “Cayman Oligarchs” who are now start sweating, as they do realize that there is no such thing as “Tax Paradise”, at least not anymore!”, Please do feel free and read our article here.

“Cyprus is the first offshore to go, the rest (of them) will follow,” those were Mr. Glazyev’s exact words in an interview with the state-owned Russian TV channel Rossiya 24. Russia’s plans to purge the oligarchs in order to counter societal inequality has been a matter of more than a decade, actually it has marked President Putin’s initial steps and the subsequent “elimination” of Mikhail Khodorkovski, ex Yukos’s boss, by putting him to jail for tax evasion. Once again, we do not wish to approve or disapprove, however admittedly a bipolar society comprised of ultra rich and ultra poor is as short lived as dangerous. This great “chasm” between the poor and the rich was enlarged once the Middle Class started to shrink after the first hit on Bear Stearns in 2007 and these from 2008 onwards. For the B.R.I.C.S this chasm constitutes their “curse”, as countries like Brazil, India and China may show astonishing results in terms of their GDP, but their GDP per capita undermines their societal cohesion.

It had already been announced once Russia took over Presidency of the G20 that it would proceed with reforms such as creation of more jobs, reforming the currency system and financial regulation and control, ensuring stability of global energy markets, facilitating international development, strengthening multilateral trade and fighting corruption. The case of Cyprus if viewed through Glazyev’s statement is an example of Russia’s “moods” in terms of what now constitutes the so called “Shadow economy” and the unbelievable amount of money stored in tax free paradises such as the Cayman and Marshal Island and last but not least Cyprus as well. From the looks of it, Putin has found an ally willing to purge the rich, the banks and the oligarchs, Germany. Of course Germany has strong motives in terms of putting the Country’s interests above those of the geoeconomic players, which as stated previously, are seen as the “means” rather than “the end” itself.

Glazyev, though, stated something else in addition: “We could have solved the problems of Cyprus if it (the country) were in our jurisdiction,” Mr. Glazyev said, adding that Cyprus could have asked for a loan from the Eurasian Economic Community, or EurAsEC, under those circumstances.

It’s one thing to start a purge against the global oligarchs who refuse to pay taxes and another to engulf a country with extra serious Geostrategic issues. Russia already has unresolved matters in Central Asia, poking into the SE Mediterranean and the Middle East will not make them go away. On the contrary, Cyprus may have rich oil and gas fields, but foreign policy is not all about oil and gas. The “I want it all and I want it now” in that case can become something that Russia is about to bite without being able to chew, though.

Cyprus still has the invasion issue to resolve, which is pending since the 1974 invasion. The invasion was facilitated by American interests, thus it was not allowed to Greece to respond militarily. We will give an example. Greece then had just acquired the older Type 209 subs from Germany, which were for their age “state of the art”. The anti-sub warfare capabilities of the Turkish landing ships could not match the range of Type 209’s torpedo, which could be launched from as far as 12 nautical miles. Bottom line: At least three Type 209s were patrolling the area and they had the landing ships on their scopes. The order, though never came. They never fired, they never stopped the invasion. Moreover, we should note that at this time the relationship between the British MI6 and the CIA was at its Nadir, almost frozen, as the British were furious over US’s decision to split the island in two. Notably, the British still have interests in Cyprus and they still perceive themselves as Superpower.

That said, even if the Americans remain idle and do nothing to provoke tensions in the area, it is almost as certain as the sun will rise tomorrow that the British will flare up the Turks in order to provoke an all out war. Surely, Turkey is not a problem for the Russian army. It shouldn’t be a problem for the Greek army either in spite of having the second largest army in NATO (who said the wise quote, “size does not count”?). The problem is that if Turkey provokes Russia and Russia responds, then the whole NATO is obliged to respond according to article 7. Is Russia ready for this? No! Even if it was, the oil and gas revenues do not worth this trouble.

It’s not only in Cyprus, though, that the Turks have dipped their fingers in, it’s the Aegean as well. Having engulfed Cyprus, Russia will, albeit indirectly, inherit the problems in the Aegean Sea, the so called “Grey Zones”, which is a Greek issue, but still in that case it will pose more like a regional issue. And naturally, last but not least, there’s Israel and the Arabs, meaning that unless Russia manages to establish at least the same type of relations the US and Israel have, then Israel is not very likely to appreciate the Russians tip toeing over the edge of their Exclusive Economic Zone. Israel has made a military alliance with Cyprus just in case something “unpleasant” occurs from the Turkish side. It is not certain at all whether inheriting the region, Russia will manage to inherit the alliance as well.

Even though Russia may feel confident to expand its peripheral hegemony and pose as a broader player in regions like the Mediterranean sea for example or has aspirations to participate in the resolve of the Palestinian issue let’s say, the dangers far outweigh the gains from such an attempt.

Russia is developing into a power, which by 2020 is expected to be even mightier than its predecessor, the USSR, still though the year is 2013 and the conventional capabilities of Russia as they stand now prohibit it from confronting NATO. Not to mention, that in general a confrontation between NATO and the Russian Federation should be averted by all means necessary, rather than being directly or indirectly pursued. The same stands for both sides!

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