ECONOMY

Cyprus considers Russia its benefactor

Russia is acting as the guarantor of Cypriot security and territorial integrity as the island pursues a financial rescue to help mitigate threats to its economy, Foreign Minister Erato Kozakou-Markoulli said on Wednesday.

Russia was not offered the use of a naval base on the southern coast of Cyprus in exchange for a second bailout loan in less than a year, Kozakou-Markoulli (photo) told reporters in Moscow after talks with her Russian counterpart, Sergei Lavrov.

Russia, whose only military base outside the former Soviet Union is in the Syrian port of Tartus, less than 200 kilometers east of Cyprus, is weighing a request for 5 billion euros, which the euro area?s third-smallest economy is seeking on top of a possible European bailout.

Russia?s position in the UN, where it is among five nations that wield a veto as permanent members of the Security Council, is a ?shield against any actions against our independence,? Kozakou-Markoulli said in remarks translated into Russian.

Cyprus, led by President Dimitris Christofias, the Moscow-educated former head of the Cypriot communist party AKEL, last month followed Greece, Ireland, Portugal and Spain in requesting help to return to financial health.

The economy, hurt by more than 4 billion euros of writedowns in Greek government debt held by Cypriot lenders, is seeking support from the euro region?s firewall funds to bolster its banking industry.

OAO Novatek, Russia?s second-largest natural gas producer, joined Total SA and GPB Global Resources in May to bid for energy exploration permits off Cyprus as the nation held its second licensing round after finding gas last year. [Bloomberg]