ONE YEAR LATER: WHICH WAY FOR CYPRUS?
by Andreas Theophanous, Professor of Political Economy and Director General of the Center
Last year on April 24, the UN Plan for the resolution of the Cyprus question was put to two separate
referenda and was rejected by an overwhelming 76% of Greek Cypriots. The Republic of Cyprus,
whose government is the only internationally recognized entity and represents the entire island, is
now a member of the EU. There is less tension than ever before, and increased but still relative
freedom of movement. Over 7,000 Turkish Cypriots are working in the government–controlled areas
– and many Greek Cypriots have been visiting the areas they deserted during the 1974 events.
It is instructive to understand why the Plan was rejected – but it is even more important to see how
Cyprus can move forward to a sustainable solution that may provide benefits not only to the parties
directly involved but also to the broader area. After all, a functional model for the coexistence and
creative cooperation between the Greek Cypriot Christians and the Turkish Cypriot Moslems in Cyprus
would serve much broader objectives.
To the vast majority of Greek Cypriots, Annal Plan V would not only have legitimized the outcome
of the 1974 Turkish invasion and occupation of the northern part of Cyprus, but would have also
worsened the status quo and indeed reversed many of the benefits of accession to the EU. The
legitimate security concerns of the Greek Cypriots were not addressed; and the system of guarantor
powers – Britain, Turkey and Greece – was not only maintained but was reinforced. In any case,
most Cypriots (including many Turkish Cypriots) believe that the Republic of Cyprus has matured
and does not require “guarantor powers”.
Following the partial lifting of restrictions on free movement on April 23, 2003 and the supporting
measures of the government, more and more Turkish Cypriots have been applying for official documents
of the Republic, receiving free medical treatment in state hospitals, and securing employment in the
government-controlled areas. Indeed, relations between the two communities at different levels have
improved; and the hypothesis that the two communities cannot live together was not confirmed.
Economics is influencing the relations between the two communities. And it is the economy that to a
great extent will sustain the solution. Following the 1974 debacle, the government-controlled areas of
Cyprus managed not only to recover but also to generate what has been described as an “economic
miracle”. It was this performance that enabled the Republic of Cyprus to successfully pursue its
accession to the EU. And Cypriots assumed that a solution of the political problem reunifying the island
would lead, at minimum, to economic gains for all and, at maximum, to a new economic miracle. Yet
for many Greek Cypriots, the Annan Plan seemed to ignore fundamental economic principles. A major fear
was that, in the event of its implementation, there would have been serious socio-economic deterioration
for the Greek Cypriots. Such an outcome would have been destabilizing – adversely affecting the Turkish
Cypriots as well, even though the latter would have benefited in the short run.
The strict bizonality requirements of Annan Plan V would have effectively undermined the prospects of
a unified economy and thus of the convergence of the productivity levels and of living standards of the
two communities in Cyprus. The Greek Cypriots also suspected that the complex constitutional arrangements
proposed under the Plan would certainly not have led to a functional system but to paralysis and breakdown.
The majority of Greek Cypriots also perceived that Annan Plan V would not lead to a cooperative political
system but instead would consolidate division and produce bottlenecks – to be resolved by non-Cypriot
judges, who would effectively assume supreme political power.
The provisions for addressing property issues were not considered satisfactory either. There is also a
growing conviction that more integration and greater reliance on market forces may address such complex
issues much more effectively than legal provisions, the interpretation of which may not be clear even to
those drafting them.
The question is how to move forward. The election of Mehmet Ali Talat as the new Turkish Cypriot leader
on April 17, 2005 may be indicative of sustained support for reunification – even though no major move can
occur without the consent of Ankara.
Inevitably, relations between the EU and Turkey affect Cyprus. Turkey may be tempted to keep Cyprus
as a hostage for its own accession. But this does not have to be the case. Under the circumstances,
the most practical step is an essential upgrading of the confidence building measures between the two sides
on the island. That should include the return of the ghost town of Famagusta to the Greek Cypriots and
more economic opportunities for the Turkish Cypriots. Enhanced cooperation and more tangible benefits
for both communities would pave the way for a sustainable settlement that would be to the benefit of all
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