Cyprus Counts on Its Close Ties to Russia LIMASSOL, CYPRUS - Caviar and pelmeni line the supermarket shelves in this picturesque seaside Cypriot city, so pervasively Russian that it has been dubbed "Limassolgrad." Now, many on this tiny island nation, whose banks and government are facing economic insolvency, are hoping for financial salvation from Moscow rather than Berlin and the European Union. "I would much rather be saved by Moscow because Russia is our friend and won't impose harsh terms," said Elena Tsolia, 30, an attendant at the department store Debenhams, where Russian shoppers snap up bottles of Dior and Chanel perfume. We are a small island and we don't want to be owned by Germany. The slim victory in Sunday's elections by a pro-bailout party in Greece has helped allay some of the concerns that a potential Greek exit from the euro zone would sink the Cypriot economy, which is heavily exposed to Greek banks. But as a backlash against austerity spreads across Europe, Cypriot officials say they are determined to avoid the kind of draconian budget cuts that unhinged the Greek economy. The Russian government last year gave Cyprus a three-year loan of €2.5 billion, or $3.1 billion at the current exchange rate, at a below-market rate of 4.5 percent to help it service its debt. Cyprus now needs at least €1.8 billion by the end of this month to buttress its ailing banking sector. Officials say they hope to negotiate securing a new loan from Moscow as soon as this week that analysts said could be as large as €5 billion. A loan from Moscow is the favored option, they say, since it would come with fewer conditions than an E.U. bailout and help ensure that Cyprus's 10 percent corporate tax rate - the lowest in the Union and the main draw for the estimated 50,000 Russian-speakers in Cyprus - remains unchanged. But some analysts warn that by turning to Russia, Cyprus, threatens to become a vassal of the Kremlin. As it is, President Demetris Christofias, a keen ally of the Russian president, Vladimir V. Putin, and the only Communist leader in the European Union, could prove an awkward public face when Cyprus takes over the rotating presidency of the Union on July 1. Mr. Christofias, a fluent Russian speaker, studied at university in Moscow and has personally overseen loan negotiations with Russia, officials say. On a previous trip to Moscow in 2008, he called himself "the red sheep" of Europe. "Cyprus needs to decide if it wants to be a member of the European Union or the Soviet Union," Fiona Mullen, a leading analyst in Cyprus, said. She noted that if Cyprus accepted a second Russian loan, nearly two-thirds of its gross domestic product could potentially be in thrall to Russian lenders. That prospect is stirring anxiety among the island's high-spending Russian expatriates and their army of accountants and lawyers who benefit from operating in a country shielded from Russian lawlessness and corruption. Some analysts warn that Russia could demand a heavy price for its support, including a stake in the large reserves of natural gas recently discovered in Cypriot waters in the Mediterranean. Nicosia insists a Russian loan will have no effect on the bidding process. But Cypriot gas will help offset E.U. energy dependence on Russia, and analysts say Moscow's intentions remain unclear. To many Cypriots and members of the island's Russian community, criticism of a potential Russian loan smacks of hypocrisy. George V. Vassiliou, the former Cypriot president who pioneered the 10 percent corporate tax rate, said during an interview that it was only natural that Cyprus would seek the most favorable terms. Criticism of Russia's influence in Cyprus, he added, was little more than Russophobia. "This is a remnant of the Cold War," he said. If Citibank were offering a loan, no one would accuse us of being a vassal of the United States. The ardent affair between one of Europe's tiniest countries and its giant ally is grounded in mutual interests.