Russia Today

Given his origins in St Petersburg which, as Leningrad, had been downgraded and largely left to rot under the Soviet regime; plus his subsequent career in the KGB, I am continually astonished how ably President Vladimir Putin is coping with the massive range of issues and responsibilities that fall on his shoulders.

He succeeded the drunken shell of the once-outstanding Boris Yeltsin, under whose presidency of Russia - just one of the successor states to the collapsed Soviet Union - the crumbling economy had been despoiled and brought to the brink of ruin. Crass and corrupt 'privatisation' [which had supposedly been intended to hand out shares in all major assets to the mass of the people] had enabled the most competent of the former 'fixers' to acquire control of massive corporations and rightly earn the description as 'oligarchs' and as a 'mafia'. Under the Soviet regime, especially when strict Stalinist controls and planning targets were relaxed, the economy was only able to function by factory managers and farm directors operating a massive black market in which clothing and shoes were bartered for industrial output and food, so that the towns' workers could be fed and the oppressed involuntary farmhands shod; while the factories and farms turned in less than their planned output to the official channels of distribution. This huge trade was managed by risk-takers who were occasionally arrested when one of them failed to bribe the local party officials sufficiently, or when some illicit trade became so much of a public scandal in the region where it was perpetrated that action simply had to be taken to restore some credibility to the regime.

The spread of television gave millions of people more awareness of how low the standard of living for hard-working Soviet subjects had become, in comparison to western Europe and the USA. The diffusion of access to telephones allowed millions of people - especially in western Russia, Belarus, the Ukraine, the Baltic Republics [which had slightly better access to knowledge of Scandinavia] and the European satellite states - to begin personal bartering to raise their own standard of living. Swapping knowledge, access to better schools and hospitals, and admission to the queue for buying cars, electrical goods, western records and properly-made jeans. This development of trade went on through the stagnant years of Brezhnev's presidency, and reached such proportions in the early years of Gorbachev's rule that his government took strenuous measures to drive this illicit trade further underground so that the government's plans to develop a real consumer economy might have some chance of success. With the collapse of Gorbachev's regime and into the chaos of the Yeltsin's years, it was only the illicit swap economy that kept most households going. as the formal economy collapsed.

Putin's achievement has been to create something very broadly like a market economy in less than twenty years. This accomplishment has been unprecedented: and it is recognised by the genuine 80%-plus approval rate that the president has received from the Russian population. The many faults of the regime, the corruption and the acts of oppression that are far too common, are well reported in the west. Those are is important aspects of life in modern Russia, which in an ideal world would quickly be rectified: but priorities have to be set, and a broad consensus of the population accepts the sequence that has been adopted.

Cyprus and Russia [Not Forgetting the Ukraine and Belarus]

Cyprus is a fascinating island. In the centuries when the island was occupied by the Ottoman Empire the Sultans mostly left the Greek majority population to a semi-autonomous existence under the rule of an ethnarch - the acknowledged leader of an ethnic group - who in this case was the Archbishop of the Orthodox Church. By a complex pattern of historical accidents the Archbishopric had developed strong links with the Orthodox people of the Russian Empire, particularly as a significant landowner in the Ukraine. The Archbishop's land was seized by the Communists and fell under the appalling mismanagement of the collective farm system: but the lost wealth was lamented and remembered through subsequent generations of Cypriots.

Britain grabbed the sovereignty of Cyprus at the Congress of Berlin in 1878, when the weakened Ottoman Empire was compelled to surrender some territories in order to be allowed to keep the rest. Disraeli's government saw Cyprus as a useful base in the 'near east', close to the main Suez Canal route to India. Come the nineteen sixties, and despite the abandonment of the Empire, Britain was under pressure from the USA to maintain a presence in Cyprus because its location gave the island a unique advantage as a listening-post into communications throughout the Middle East and the Soviet Union. RAF bases on the island also provided a staging-post for transport into the region, not least to get emergency supplies from the US to Israel  in times of war. Thus when Cyprus was granted independence in 1960 [a situation deeply compromised by the resistance of the Turkish minority to the majority wish for union with Greece] Britain retained the sovereignty over the key bases, which included the listening-posts: this remains the situation now, of huge value to the USA in relation to Iraq, Afghanistan and Iran.

Both before and after independence the strategic situation of Cyprus was of great interest to the USSR, which led to the KGB encouraging the development of a tourist trade from the communist Warsaw Pact countries; some of which was a cover for espionage. Among the 'tourists' and alongside the spies were the gangsters who were tolerated as 'fixers' in the dysfunctional planned economy, who began to make deposits in and investments through Cypriot. banks. The collapse of communism and the disgusting economic free-for-all that the Yeltsin regime could not control led to a massive expansion of the flow of funds into the familiar and highly accommodating Cypriot banks. Cyprus was a member of the EU, and this made the island an even more attractive money-moving location for the nouveau riche from the former USSR. Tiny Cyprus has become one of the largest investors in the Ukraine and in Russia: returning funds deposited by large and small oligarchs from those countries. The tradition of the Greek-speaking Cypriots in regarding Greece as their natural partner led to Cypriot Banks investing very heavily in Greek state bonds and bank deposits: which has given them a massive 'haircut' as the Greek assets have become worth much less.

It is of huge interest to the Russian, Ukrainian and Belorussian depositors in Cyprus that the negative impact of the Greek collapse should not wholly be exported to Cyprus, diminishing the value of bank deposits on the island. Many of the richest Russians are very keen indeed that Cyprus should remain in the eurozone, and large loans [at least three billion euros] have already been made to Cypriot institutions. There is at least a probability that official Russia will become the saviour of the Cypriot banking system, by providing a bail-out that will preserve the valuations in euros of immense private investments that represent a significant proportion of the plundered national income from the past two decades. This potential twist in the eurozone crisis is well worth watching.