A key European tourist destination is set for the summer season, mostly without Russian tourists, amid sanctions imposed due to events in Ukraine. However, in Cyprus, “de-Russification” did not appear after the events of February 24, but much earlier: since 2013, the Russians have gradually withdrawn from different sectors of the island, Aljazeera reported. Now it's the turn of tourism.
The tourism resort of Cyprus, where in recent years there has been an increase in the Russian tourist flow, has suffered against the background of the unfolding events around Ukraine and anti-Russian sanctions imposed by the West. Last year, Russians made up a quarter of the two million visitors to Cyprus and brought in about 290 million euros – a fifth of the country's tourism revenue.
Fiona Mullen, who runs consulting firm Sapienta Economics, calculated that the effect of the absence of Russian tourists and high energy prices would result in a net loss of 0.9% in the tourism market this year, the paper said. This could be relatively insignificant were it not for the fact that many Russians combine holidays in the resort of Cyprus with such business activities as investing and banking.
“Russia and Cyprus have long-standing ties due to the Orthodox church and the fact that Cyprus was part of the non-aligned movement during the Cold War,” Mullen explained. – He had a good double tax treaty with the Soviet Union that was in effect after 1990, so after the collapse of the USSR, this became the reason for the development of business. And [the Cypriots] do not have such distrust of Russia as the NATO countries.”
Russia's influence on the Cypriot economy was once great. Until 2013, Russians accounted for $23.1 billion in bank deposits in Cyprus. In February, after the well-known events, this figure fell 3.4 times to $6.9 billion.
According to the expert, de-Russification began with the banking crisis in Cyprus in 2013, when the EU intervened to save the financial sector. “Since 2013, Russians have moved away from banks, gradually they left the professional services sector, then they left real estate, now it’s straight across the board,” Mullen said.
In 2020, Cyprus also decided to accept measures to stop the practice of issuing “golden visas” and passports, including to citizens of Russia and China. Nevertheless, according to the expert, Russian business accounts for up to 4.8% of the gross domestic product (GDP) of Cyprus. “There are specific companies that rely very heavily on Russian business [that will suffer] – some hotels that only have package tourism, and some legal and legal firms that rely very heavily on Russian clients,” the director added.
But the situation may change. Cyprus attracts with lower income taxes the so-called digital nomads and businessmen from Russia and Ukraine who want to settle on the island and not pay “extra”.
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