Cyprus denies 'Russia deal on military bases' Published duration 9 February 2015

image copyright AFP image caption Limassol, May 2013: The Russian anti-aircraft ship Admiral Panteleyev paid a visit

Cyprus has denied Russian media reports that it is ready to lease two military bases to Russia.

"There is no question of Russian air or naval military bases on the soil of Cyprus," said Foreign Minister Ioannis Kasoulides.

Earlier, Russian government newspaper Rossiiskaya Gazeta said Cyprus President Nicos Anastasiades would make the offer on an official visit to Moscow on 25 February.

Cyprus is in the EU but not in Nato.

The leasing deal would concern an air base near Paphos and a naval base at Limassol, according to Rossiiskaya Gazeta. Russia can already use the bases temporarily.

But Mr Kasoulides dismissed the leasing claim, saying "there has never been any request from Russia about this", the Cyprus News Agency CNA reported.

He said President Anastasiades was referring to "the renewal of a military co-operation agreement with Russia consisting of maintenance of military equipment sold to Cyprus years ago, as well as the purchase of spare parts according to existing contracts".

He added that "as regards the offering of facilities, these are of a purely non-military humanitarian nature, such as the evacuation of Russian civilians from the Middle East if the need arises".

Russian warships can already use the Limassol base for refuelling and the Andreas Papandreou air base for humanitarian missions.

Financial help?

In the eastern Mediterranean the Russian navy can only repair ships currently at a small naval dockyard in Tartus, on Syria's coast, Rossiiskaya Gazeta reports.

In exchange for a deal on bases Cyprus could receive Russian financial help for its still ailing banking sector, which suffered a meltdown in 2013, the paper says.

However, Russia - a major oil and gas exporter - faces financial difficulties itself this year, because of EU sanctions and the slump in oil prices.

Russian businesses began moving billions of dollars to Cyprus in the early 1990s, taking advantage of low tax rates and treating it as a "safe haven". But the 2013 Cyprus bailout imposed losses on Russian investors, as well as others.

Tensions with Turkey

As part of a deal Russia could also help Cyprus by putting pressure on Turkey, Rossiiskaya Gazeta says, as Turkey is opposed to Cypriot offshore oil and gas exploration.

Cyprus has been divided since 1974 when Turkey invaded the north in response to a military coup on the island which was backed by the Athens government. The self-styled Turkish Republic of Northern Cyprus is not internationally recognised.

The idea of leasing bases to Russia would be highly controversial, as Cyprus has to comply with EU sanctions imposed on Russia over Moscow's intervention in eastern Ukraine. Those sanctions include Russian military industries.

Such a move could also raise tensions with the UK, which has two big sovereign military bases in Cyprus - RAF Akrotiri and Dhekelia.