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Cyprus - The party was in full swing at the glitzy 7 Seas club on Wednesday. A hundred Russian girls turned up (as they always do) for the weekly Ladies’ Night, cavorting in Louboutin heels to loud music as they downed vodka cocktails, chilled Cristal champagne or both.
Without a care in the world and Daddy’s credit cards in their pocket, they giggled as swarms of young Russian and Cypriot men in leather jackets and designer jeans chatted them up.
And when the music stopped at 3am, the rich young jet-set of the island’s seaside city of Limassol roared away in Porsches and Range Rovers to party the rest of the night away at million-pound mansions in the hills or swish, newly built apartments overlooking palm-fringed beaches.
As blonde Katy Mass, a 29-year-old Moscow-born divorcee and businesswoman who was spending an evening at the club with three Russian girlfriends, said simply: “Cyprus is heaven and we Russians love the sun.
“What happens next to our paradise island none of us know. But everyone is enjoying themselves while it lasts.”
The truth is that the fun might not last very long.
For Cyprus is on the verge of bankruptcy. Its banks are shut and 70 percent of the island’s account holders (including many of the 50,000 Russians who live here) have applied to withdraw all their money if, and when, the banks ever open their doors again.
Cypriot MPs are terrified that foreign investors will leave the country. And by foreign investors, they mean the Russian oligarchs, businessmen and shadowy mafiosi who have flocked here over the past 20 years, buying up real estate, investing billions — and turning the place into a little Moscow.
Many Russians on the island are already packing their bags and putting what money they have into gold.
As one of Limassol’s most successful jewellers, Armenian Raffi der-Garabedian, told me on Wednesday as the crisis unfolded: “Yesterday, I had one of my best days ever. Most of my customers are Russian ladies. They like good jewellery and will spend £4,000 at a time.
“But this week they were buying items for the gold. They know that if they put their money into gold instead of the bank, no one - not even Angela Merkel and the EU - can take it from them.”
His words were echoed a pretty, dark-haired, 30-year-old Russian-born accountant who lives on the island. She warned: ‘Cyprus is in a suicidal situation. Many Russians are scared they will lose everything, and I expect them - and their money - to leave the island.
“Those who have real funds will never trust the Cyprus banking system or the EU again. There are plenty of other places for our rich to go: the Cayman Islands, Jersey, Luxembourg. This is a bad day for Cyprus. As a financial centre, the island’s reputation is ruined.”
Yet it is little surprise that over the past two decades Russian eyes have turned to Cyprus, a three-and-a-half hour flight from Moscow.
The two nations have a lot in common: importantly, a shared Orthodox religious faith and the Cyrillic alphabet.
But it was not only the sunshine that attracted them. As Russia’s elite grew rich after the fall of communism, the Cypriot authorities didn’t ask awkward questions about bank deposits or where the money came from (with interest rates of up to 6 per cent).
They did not even demand that the depositor had a visa.
There was the bonus of a flat tax rate of 10 per cent and automatic EU residency for anyone who bought a property priced at more than £275,000.
Today, almost half of the £55 billion in the Cyprus banking system belongs to Russians.
EU finance chiefs are reluctant to give a bailout to an island that they suspect is a safe haven for billions of pounds of laundered cash each year and which benefits Russians operating on the wrong side of the law. A recent report in Germany’s Der Spiegel magazine, based on an investigation by the country’s foreign intelligence agency, said most Russian money in Cyprus had been moved there illegally to evade Russia’s tax authorities.
Typically, the Russians cheat the system by putting their illegal money in anonymous “shell” companies in Cyprus, taking advantage of the low rate of corporation tax, the discreet banks and a government that asks few questions of foreign investors.
“The Russian mafia uses Cyprus extensively,” said Hubert Faustmann, associate professor of European Studies at Nicosia University, recently. “That is one reason why Russia has no wish to see Cyprus go down economically.”
In the financial hub of Limassol, where 19,000 Russians have made their home, fur shops sell sable coats for £35,000 - even in the heat of the Mediterranean summer.
Restaurants serve herring and caviar flown in from the Black Sea to suit the Slavic palate.
And the sour Russian yoghurt drink, kefir, is on sale in the seaside cafe-bars, along with Russia’s most popular beer, Baltika.
At private schools set up to cater for the newcomers, two-thirds of the children are Russian.
On the promenade, every other glossy boutique has a Russian name. There are two Russian radio stations and a growing number of Russian newspapers and magazines.
At a posh car rental company on the promenade, the Russian manager, 30-year-old Anna Lazova, offers a day’s hire of a Maserati or Aston Martin DB9 for £1,400. There are always plenty of takers - most of them Russian playboys.
A dazzling white building with two towers on the Limassol seafront -advertised as Cyprus’s first high-rise condominium with £1.7 million penthouse apartments and a walkway to a private beach - already has a handful of oligarchs in residence.
A few miles away, in the hills, there are wide avenues lined with orange trees where the Russians have built so many mansions it’s called “Moscow’s Mayfair”.
Has Cyprus become a sunny place for shady people? Natalia Kardash, editor-in-chief of Vestnik Kipra, the popular Russian weekly newspaper in Cyprus, sees it from another point of view.
She says: “Cyprus is very comfortable. Put yourself in the position of a Russian businessman who wants to work here. He brings his family, his wife can go shopping, everyone speaks Russian.
“There are dozens of Russian hair salons and nail parlours, and soon she feels at home.” Yet is this the real picture?
This week I heard stories about the hundreds of wives and mistresses of Russian oligarchs, tycoons and businessmen who live on the island in lonely luxury, all but abandoned by their husbands or lovers.
“The men stay in Russia and run their businesses,” said Karolina, a 27-year-old mother of two children aged four and six, who moved to the island from Moscow with her parents as a teenager.
“They fly in every weekend by private jet to see their families and keep an eye on their offshore interests here.”
She added: “The wives soon feel lonely, but still, it suits the Russian men. They like to know their families are in a safe place in the sun, that the children are in good English- language schools and are nearer to Western Europe when it comes to going to university.”
However, Alexey Voloboev, a 40-year-old former Moscow oil trader, who moved to Cyprus with his young family seven years ago, thinks the Russian love affair with the island is all but over.
He set up Russian Wave Radio and owns the swanky Frank Sinatra Karaoke Bar on the main promenade in Limassol, where the menu is in Russian and English.
Cyprus has been good to him. As he told me in his busy bar, full of Russian customers: “We heard about Cyprus by word of mouth back in Moscow. At first it was only a few who came, but soon we realised it offered the kind of life we craved. I thought it was heaven.
“I have three children and we went to the beach at weekends. We went to parties, we ate out, we loved life.
“But now everything has changed and the Russians will definitely leave. I am hoping to move to London or Edinburgh.”
Voloboev predicts that 90 per cent of the Russians will disappear from the island and go to the UK or tax havens such as the British Virgin Islands. And he warns that, once the Russians quit, Cyprus will quickly begin to suffer.
He says the signs are there already. Three oil tankers have been unable to dock in Limassol because their Russian owners can’t get money from the banks to pay the port fees.
“Businesses are beginning to unravel. This island will face a catastrophe when they lose all the money we Russians spend and invest here.”
Yet, this week, as the temperature hit 75 degrees, young Russians - nicknamed Cypruskies - were reluctant to admit the party was really over.
In the 7 Seas club, 17-year-old Christina Bachinskaya, studying at the University of Nicosia, said: “I feel as though this is my own country. I have never known anywhere else. We all speak Russian and have a good time. I don’t want to go.”
As I leave her sipping cocktails on the club’s terrace, the Cypriot manager Eddy Nassar calls me to one side for a word.
He whispers in my ear: “Please say nice things about the Russians. Our country needs them. They are the people who buy the champagne.”