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December 28, 2014 / 6 Tevet, 5775
 
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Posts Tagged ‘Cyprus’

Upping the Ante: 5 Russian Warships Enter the Mediterranean

Friday, May 17th, 2013

In its latest escalation of the international anxiety over the Syrian civil war, Russia announced on Thursday that a group of five warships from its Pacific Fleet have entered the Mediterranean sea to bolster a new regional task force, according to a fleet spokesman quoted on the state-owned news agency RIA Novosti.

“The task force has successfully passed through the Suez Canal and entered the Mediterranean. It is the first time in decades that Pacific Fleet warships enter this region,” Capt. First Rank Roman Martov said.

Novosti said the warships’ immediate destination was Limassol, on the island of Cyprus, where they will join Russia’s Mediterranean task force.

An official from the Russian Embassy in Beirut confirmed to the Daily Star of Lebanon that the ships were indeed in the Mediterranean, adding that it was merely a routine procedure.

First such routine procedure since 1992.

Russia maintains a military base in the port of Tartous, Syria.

Novosti said the vessels – including the destroyer Admiral Panteleyev, the amphibious warfare ships Peresvet and Admiral Nevelskoi, and a tanker and a tug – left the port of Vladivostok on March 19. The Russian plan to expand its naval presence near Syria was announced in April.

A permanent naval task force in the Mediterranean was needed to defend Russia’s interests in the region, Russian Defense Minister Sergei Shoigu said in March.

It’s like the Cold War never ended.

According to Novosti, a senior Defense Ministry official said the Mediterranean task force’s command and control agencies will be based either in Novorossiysk, Russia, or in Sevastopol, Ukraine.

The U.S. Navy’s 6th Fleet maintains its own permanent presence in the Mediterranean.

Moses’ Gift: Natural Gas in the Mediterranean

Sunday, April 14th, 2013

Golda Meir once quipped that Moses could have done the Jewish people a better service. “He took us 40 years through the desert,” she said, “to bring us to the one spot in the Middle East that has no oil.”

Today, Golda Meir’s quip has lost its punch. Last week, natural gas began flowing out of the Tamar gas field, discovered off the coast of Israel in January 2009. Tamar and Leviathan, its neighboring gas field, discovered in June 2010, are among the world’s largest recent offshore natural gas discoveries. The Israeli companies controlling the fields are even considering exporting gas to neighboring countries.

Geologists assume that commercial oil reserves may lie beneath the gas find. Some analysts say that the Tamar and Leviathan fields might change Israel’s position in the geopolitical and energy world. But not just Israel’s.

The Israeli fields are adjacent to the Aphrodite gas field, discovered in December 2011, which lies in Cypriot territorial waters, less than 25 miles west of Leviathan. The government in Nicosia expects that the result of offshore drillings will confirm later this year that the island is sitting on vast amounts of natural gas worth billions of dollars. The recent banking crisis in Cyprus –the latest episode in the saga of the collapsing euro – came too early for the country to benefit from its future natural gas wealth. It is, however, indicative that Cyprus turned down the European Union’s demands that the gas reserves be used as collateral for the loans which the E.U. has just extended to Cyprus.

Brussels had demanded that a fund be created in which it was given a direct say over the revenues from Cypriot gas reserves, but Nicosia refused to do so. The Cypriots feel betrayed by the E.U. Hence, they are not inclined to let Europe share in the future wealth which they hope to derive from gas. Nicos Anastasiades, the president of Cyprus, said that Cyprus had no other choice than give in to the harsh demand of Brussels that it dismantle its banking sector. He, however, promised that savers who lost money in the Cypriotic banks would be compensated by being given shares in banks guaranteed by the future natural gas revenues.

Today, Cyprus is paying a very heavy price for its membership of the E.U.’s common currency, the euro. When by 2019 the gas proceeds are expected to start flowing, the tables will be turned. Then Cyprus will be in a position to leave the euro without facing the prospect of national bankruptcy.

To begin extracting the gas from the Aphrodite field by 2019, however, the virtually bankrupt Cypriot government will in the coming years need to make enormous investments. The Russian state-owned gas company Gazprom, the largest extractor of natural gas in the world, seems keen to get involved. So far, however, the Cypriots have kept the Russians at bay.

Europe is already to a large extent dependent on Russian gas, supplied by Gazprom, a company controlled by the Russian oligarchy around President Putin. A quarter of Europe’s of Europe’s entire gas consumption comes from Gazprom. As a new player in the market of gas exporters, Cyprus could reduce the European dependency on Russian gas.

What applies to Cyprus, obviously, applies to Israel as well. It, too, could use its gas exports to a political end. Bat Ye’or has argued that the pro-Palestinian positions of the European governments since the 1970s were to a large extent the result of Europe’s dependency on Arab oil. Israel has a unique chance of also using the Cypriot gas to its own geostrategic benefit. The Cypriot gas fields are located halfway between the Cypriot and Israeli coast. Israel, Cyprus and Greece are already collaborating in the EuroAsia Interconnector project, which is an undersea power cable linking Israel with Cyprus and Cyprus with Greece. A gas pipeline following the same route would balance the current pipeline on the Baltic seabed linking Russia with Germany.

Another opportunity for Israel might be the fact that some international gas companies are reluctant to get involved in the exploitation of Cypriot gas fields because they also operate in Turkey and do not want to upset the Turkish authorities who oppose the Cypriot gas extraction. Though the Aphrodite gas field lies in waters across Southern Cyprus, Turkey is demanding that all gas revenues be shared with Turkish occupied Northern Cyprus.

Cyprus: When the Law Prescribes Theft

Sunday, March 31st, 2013

Who will shoulder the pain from the Cyprus bailout deal?

The first-order sufferers will be small businessmen (mostly Russian) and upper-middle Cypriots and foreign residents with their money in Cypriot banks.  But the whole region will take a longer-term blow from the loss of Cyprus as a place for upstart businesses to park capital.  Capital that can’t be parked cheaply in the E.U. won’t be invested in the E.U. – at least not by the smaller, less financially “connected” entrepreneurs who drive economic dynamism and growth.

The big Russian firms that bank with the Russian Commercial Bank in Cyprus have protection in the deal, although they will have more trouble moving capital around under the “capital controls” to be implemented, which hwill keep depositors from draining their accounts.  Russia has been relatively quiet and mild on the terms of the Cyprus deal, largely because the biggest Russian depositors in Cyprus bank with the Russian Commercial Bank and won’t be hit with the 40% “amputation” tax on their accounts.  For the average traditionally-autocratic government, smaller entrepreneurs are always easier to accept as roadkill.  They may create jobs and revenue, but they aren’t in a position to line politicians’ pockets and they’re not easy to marshal as a means of geopolitical leverage – unlike, say, Gazprom.

It will hurt the E.U. for Russians to flee Cyprus; it will hurt equally for only the biggest, most state-connected Russians to remain in Cyprus.  All the Russians won’t necessarily flee,  but if nothing else changes, and the bank deal defines the future, the dynamism of the Russian economic presence in Cyprus will be bled off.  The economy of Cyprus will become more of an elephants’ dance than a coyote squabble, even with the gas eventually coming up from the ocean floor.  Cyprus will go further down the road taken by too much of the E.U., discouraging entrepreneurship and overserving itself on the future obligations.

Italy and Spain are obvious others to bring up, of course, and everyone is doing that.  Besides serious debt and bank-solvency problems, they have already gone further down the controlled-economy road than Cyprus has (which is the main reason for their debt and solvency problems).  Their big-name companies, the international giants, are incapable of growing the economy, because it doesn’t work that way.  The big firms aren’t the future.  Small entrepreneurship is always and everywhere the future, and in Italy and Spain, engaging in it openly is discouraged by regulation and the tax code.

There is a regional aspect to this, of course; a difference among points of the compass, inside both countries, and between city and hinterland.  Such differences are creating fault lines throughout the E.U.  Those gaps aren’t going to narrow any time soon.  Now is a good time for the E.U. to take stock and recognize that the entire Cyprus problem, like the Greece problem, was created by the actions of government.

Left to their own devices, people coming together for economic activity don’t do this to themselves.  Failure is liquidated; it is not enshrined in policy.  But governments do the opposite, propping up and enabling failure for as long as they can, because they insist for political reasons on the policies that make it inevitable.  Government’s perspective is always political, and therefore inimical to economic efficiency.  The more government is chartered to control, the richer a society has to be to afford it.  And unfortunately, there’s a kind of “peak government” rule to this: a society in which government controls too much cannot stay rich.

The U.S. is headed down this path too, but most of the E.U. is already further down it.  The E.U. and its individual nations created this problem through policy.  There’s a political relief-valve aspect to making “the Russians” pay for it (although the FT article linked to above points out that at-risk Russians expect to find ways to get their money away from the amputator’s saw).  But the Cyprus crisis illustrates nicely that the cost of over-regulatory government will lead to outright theft from the people.  Policy as cosmically comprehensive as that in the E.U. model will indebt everyone, until theft seems to be the only option left.

This isn’t a condition for stability.  Moscow hasn’t given up on Cyprus, which still sits enticingly athwart Turkey and Europe.  The Cyprus deal won’t last very long – not while Cyprus and the E.U. remain in the vise of the E.U.’s negative, defensive policies.  (If the Russians sneak enough of their money out, the Cyprus deal won’t last long enough to auction off the office supplies with the Laiki logo).

Why Israel Should Recognize the Turkish Republic of Northern Cyprus

Sunday, February 24th, 2013

The Republic of Cyprus has decided to upgrade the Palestinian delegation to Cyprus in order to make it an “embassy.” The Republic of Cyprus did this despite the fact that they are opposed to other countries recognizing the Turkish Republic of Northern Cyprus, also known as Northern Cyprus, which comprises the north eastern portion of the Island and desires recognition as a state.

Article 1 of the Montevideo Convention states that for an entity to be a state under international law it must possess: a permanent population; a defined territory; a government; and the capacity to enter into relations with other states. Presently, Northern Cyprus meets all of these criteria. They have a permanent Turkish Cypriot population that makes up the majority of the population in Northern Cyprus, with an effective united government ruling over this territory and they furthermore have the ability to enter into relations with other states, if only the international community was receptive to them.

Contrast that with the Palestinians who are divided between Fatah in Judea and Samaria and Hamas in Gaza. Israel also controls 60 percent of Judea and Samaria, as well as Jerusalem, which Palestinians claim as their capital. The Palestinians thus neither have a defined territory or government. Furthermore, with a great part of the Palestinian’s “refugee” population living in exile and Jewish communities scattered throughout areas that the Palestinians claim for a state (with Jews making up the majority of the population in what is known as “Area C”), it is questionable whether the Palestinians possess a permanent population as well.

The Turkish Cypriot cause is also one that Israelis should sympathize with. The London and Zurich Agreements of 1959 proclaimed that the island of Cyprus was supposed to be a partnership between the Turkish and Greek Cypriot communities. The Greek Cypriots violated this agreement in an attempt to unite the island with Greece, in order to deny the Turkish Cypriots political equality (just as the Palestinians and the rest of the Arab world were against permitting Israel to exist under any borders). During 11 years of bloodshed, 103 Turkish Cypriot villages were destroyed. By the Turkish Intervention of 1974, the junta government of Cyprus had demonstrated genocidal ambitions against the Turkish Cypriots. As Nicos Sampson, then ruler of Cyprus, himself declared, “Had Turkey not intervened I not only would have declared Enosis (unification with Greece) but I would have annihilated the Turks in Cyprus.” That mirrors similar and continuing statements from Palestinians.

Since then, the Turkish Cypriots, like the Israelis, have been attempting to reach a peace agreement. Very much like the Israelis, the Turkish Cypriots have not had much luck in this regard. Under the most recent peace proposal, the U.N.-backed Annan Plan, 65 percent of the Turkish Cypriot population accepted while 76 percent of the Greek Cypriot population rejected the peace agreement. The Greek Cypriots have since remained intransigent in their positions – an intransigence Israel has similarly felt from the Arabs.

Regardless of the justice of the Turkish Cypriot’s cause, as of last November, 131 countries have recognized the fictitious “State of Palestine” – despite the fact the Palestinian’s seeking of such a status without Israeli agreement violates the Oslo Accords – and the Israeli government has yet to take punitive action against any of them. If Israel recognizes the Turkish Republic of Northern Cyprus, it would send a strong message to all states that have elements that seek to secede and form separate states, that they too will face the consequences.

The Cyprus issue is also considered a top priority in Turkish foreign policy. Recognizing the Turkish Republic of Northern Cyprus, has the potential to significantly lesson the hostility between Israel and Turkey, despite the fact that the Islamist AKP is in power, without Israel having to issue any apology for the Mavi Marmara affair or making any other concessions to the AKP leadership. This could be good for regional stability and would lesson Israel’s isolation within the Islamic world.

Such a move might also enable Israel to build relations with the Turkish Cypriot nation, which is significantly more secular than the AKP government in Turkey and thus is not inherently hostile towards Israel. Israel could enjoy a similar relationship with the Turkish Cypriots that Israel presently enjoys with Azerbaijan, offering Israel many business and tourism opportunities.

Hizbullah Fingered in Cyprus Terror Plot against Israelis

Thursday, February 21st, 2013

The noose tightened on Hizbullah Wednesday after a Swedish-Lebanese citizen on trial in Cyprus admitted that the terrorist organization recruited him to stake out areas where Israelis gather.

Hossam Taleb Yaacoub traveled to Cyprus on business and with no ulterior motives, according to his lawyer, before Hizbullah hooked him into cooperating with it.

Cyprus police arrested Yaacoub two weeks before a suicide bomber killed five Israeli tourists and a bus driver in Bulgaria in July.

Bulgaria has accused Hizbullah of being behind the attack, and the revelation of the plot in Cyprus adds pressure on the European Union to join the United States and Britain and define Hizbullah as a terrorist organization.

Does Russia Have its Eye on Strategic Cyprus?

Sunday, January 27th, 2013

Cyprus’s banks are on the brink of collapse. As a result of a crisis that began in Greece, and as one of the 17 European countries that use the euro as their currency, Cyprus, is a victim of the euro’s domino effect, and is being dragged down by the eurocrisis, along with the entire southern rim of the eurozone.

Since last spring, Cyprus, a small country with barely one million inhabitants, has been negotiating with the other members of the eurozone about a financial bailout. When Greece was given 85 percent relief on its debts, the Cypriot banks suffered heavy losses on top of the huge losses already incurred as a result of a domestic real estate bubble. To stay afloat, Cyprus’s banks currently need some €17 bn ($23 bn) — an immense sum for a country with a 2011 GDP of only €19 bn ($25 bn) and a contracting economy.

Cyprus’s fortune, however, is its location. It is the easternmost island in the Mediterranean and of considerable strategic importance. Cyprus is like a huge aircraft carrier situated in front of Turkey, Syria, Lebanon, Israel and Egypt. In addition, huge offshore fields of gas and perhaps oil have recently been discovered in Cypriot territorial waters.

Cyprus is also the place where the Arab Spring meets the Eurocrisis. The Syrian port of Tartus hosts Russia’s only naval base in the Mediterranean. The impending fall of the Assad regime in Syria is forcing Russian President Vladimir Putin to look for an alternative to Tartus — leaving him with only one option: Cyprus.

Politically and economically, Russia and Cyprus are already closely tied. Cyprus’s President, Demetris Christofias, is the leader of the Cypriot Communist Party. He met his wife during his studies at the Russian Academy of Sciences in Moscow in the 1960s. When Russia became “capitalist,” the ties between the two countries became even closer. Thousands of wealthy Russians have put their “black money” in Cypriot banks. Although Cyprus joined the eurozone in 2008, its banks have almost no clients from other EU countries. With the exception of Greece, with which the Greek-speaking Cypriots share close cultural and historic ties, Cypriot banks cater almost exclusively to Russian oligarchs; as a consequence, tiny Cyprus is Russia’s largest foreign investor.

In November 2011, Cyprus was bailed out by a €2.5 bn loan from Russia. The eurocrisis has since deepened and more money is now urgently needed. Last June, Cyprus turned to the European Union, the eurozone’s European Central Bank (ECB) and the IMF, asking for emergency aid of at least €10 bn. In return, however, the E.U., ECB and IMF – the so-called Troika – have asked Cyprus to reform its economy. Negotiations over these “structural reforms,” such as privatization of state-owned enterprises and reduction of wages, have dragged on for almost eight months.

No agreement could be reached between the ruling Cypriot Communists, who refused to implement the reforms demanded by the Troika, and Germany, the euro’s major paymaster. Next fall, general elections will be held in Germany. With an electorate that is tired of bailing out banks and governments in Greece, Ireland, Portugal and Spain in order to save the euro – a currency which many Germans feel was forced upon them – making Chancellor Angela Merkel reluctant to come to Cyprus’s aid.

Last November, a leaked intelligence report of the Bundesnachrichtendienst (BND), the German equivalent of the CIA, made matters even more difficult for Merkel. The report asserted that a bailout of Cyprus would boil down to using German taxpayers’ money to save the funds of rich Russians, who deposited up to €26 bn in “black money” in Cypriot banks, which are now on the brink of bankruptcy. The BND accuses Cyprus of creating a fertile ground for Russian money laundering, a charge further exacerbated by the ease with which Russian oligarchs can obtain Cypriot nationality and thus gain automatic access to all the E.U. member states. The BND said 80 oligarchs have managed to gain access this way to the entire E.U.

As the financial blog Testosterone Pit explained: “Taxpayers in other countries, including those in the U.S. – via the U.S. contribution to the IMF – will be asked to [bail out] tiny Cyprus.” However, given that Chancellor Merkel has already decided that the euro must be saved at all costs, she has no other option but to bail out Cyprus, including the investments of Russian oligarchs.

Swede Held for Planning Attack on Israelis in Cyprus

Tuesday, July 24th, 2012

A Swedish citizen of Lebanese origin suspected of planning to attack Israeli targets in Cyprus was ordered held over by a court there.

The Cypriot court on Monday ordered the man, 24, detained after noting the similarities between his actions and those of the Bulgarian suicide bomber who killed five Israelis and a Bulgarian bus driver in an attack on an Israeli tour bus at the Burgas airport.

The man in Cyprus had been arrested earlier this month, accused of tracking the movements of Jewish tourists, Reuters reported. He reportedly is being held on suspicion of espionage and conspiring to commit a crime.

Cypriot Justice Minister Loucas Louca said in a news conference Monday that the investigation will continue through Friday. He said the suspect belongs to an organization not on the European Union list of known terrorist groups, but did not name the group.

He was arrested two days after arriving in Cyprus from London, and was found with a list of tourist spots frequented by Israelis, according to reports.

Printed from: http://www.jewishpress.com/news/breaking-news/swede-held-for-planning-attack-on-israelis-in-cyprus/2012/07/24/

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