Speech by Ambassador Andreas D. Mavroyiannis

 Permanent Representative

 of the Republic of Cyprus to the UN

 at the Hellenic Banker's Annual Charitable event, New York

Prospects for Cyprus in the EU - increased opportunities for reunification?

14 October, 2004

First of all, thank you very much for inviting me to speak and for the opportunity to present some views on Cyprus after accession to the EU and the prospects for a settlement of the Cyprus problem in this new context. It is a pleasure and an honour to be with you today.  2004 is indeed a special year for Cyprus and for Europe . The EU enlargement that brought in ten new members, including Cyprus , was the biggest and most ambitious in EU history. It has raised the number of the member states of the Union from 15 to 25, with a total population of over 450 million people. It has also become the most significant internal market, with an economy, surpassing in many respects that of the United States of America

It has been clear for some time that this enlargement will change the way the Union is run as the new members take their place alongside existing member states within the EU’s key institutions. Enlargement on this scale will also bring about changes in the EU’s external relations, particularly with the countries to the east and south that are its neighbors. Also as it was expected there were some upsets and problems as well as a shift in the center of gravity of the Union . Those changes also affected the transatlantic relationship, as well as the role NATO plays in this new environment. The dust, however, will slowly slowly settle and the new European Union of the 21^st century is emerging as an unwavering global player.

Like the other nine members, Cyprus joined because it saw its natural place within the EU, with which it shares the common values of freedom, democracy and prosperity. Accession is the natural course for Cyprus underpinned by its historic, cultural, social, economic and political orientation and the natural outcome of a longstanding relationship with Europe .

On the other hand Cyprus 's accession to the EU positively contributes towards the achievement of the objectives of the Union . Our accession contributed to the balanced enlargement of the European Union since Cyprus along with Malta represent its Mediterranean dimension. It  also contributes to the Union's integration process, promoting with the other member states issues, like the Common Foreign and Security Policy, the European Security and Defense Policy and Home and Justice Affairs.

The Government of Cyprus has set a direct and constructive approach to European and Mediterranean Affairs, as one of the major targets of its foreign policy. As a member of the European Union, we are becoming, more than in the past, an economic, political and cultural gate between the European Union and the area of the Middle East . This is also why we attribute paramount importance to the Euro-Mediterranean partnership and we are actively engaged in it and try to do our utmost for its success.

Cyprus enjoys a world-wide reputation as an international business center with highly educated manpower, modern infrastructure and advanced communications. With its entry into the EU, Cyprus brings with it a rich cultural heritage dating back 9000 years and a long history as well as key economic sectors such as shipping and banking. Accession of Cyprus to the EU contributes dynamically to the stability of the region as a whole. Cyprus ’ EU membership benefits both Cyprus and the EU.  Its strategic location gives Europe a stronger foothold in the eastern Mediterranean region and provides a means of access on a global scale. Cyprus is also a strong partner in the international campaign against terrorism.

As reported in the May 5^th edition of The Wall Street Journal, “ Cyprus offers a strategic location, favorable tax environment, educated work force, excellent telecommunications and modern banking and legal infrastructure which make the country the perfect business bridge for the European Union and the Middle East .”

More specifically and as far as corporate taxation is concerned, Cyprus has revised the previous system of taxation of companies so as to make it compatible with community legislation. The new system provides that all companies will be taxed in an identical manner, whether they are Cypriot companies or companies with international activities. Still, the single rate of 10% has been defined with a view to permitting the sector to remain dynamic and competitive within the new antagonistic environment.

As for the economic indicators, Cyprus enjoys macroeconomic stability and has a dynamic, flexible and adaptive economy. It has a per capita income of over 18,000 dollars the highest in the eastern Mediterranean , as well as the highest amongst the ten new EU member states, and higher than that of some of the older EU member-states. It also enjoys near full employment conditions. The unemployment rate is at 4.5% which is the third lowest among the 25 member states. Cyprus ’ Gross Domestic Product has reached $12 billion and prospects for this year remain positive. According to international statistics, the average growth of the Cyprus Economy in the period 1998-2002 was 77% higher than the EU average and 35% higher than the world average. There is a temporary diversion from the Maastricht criteria due to a fiscal deficit. The Cyprus Government has made it a top priority through a program of austerity and rationalization of expenses to bring the public deficit to the required rate by the year 2007. Already by the end of this year we expect to be part of the rate exchange mechanism which is the first, important step in joining the Economic and Monetary Union. We expect to join the Eurozone by the end of 2007.

The joy of accession, this most positive development, was however, mitigated by a bittersweet sentiment as Cyprus entered the European Union divided. We are disappointed that once again the solution eluded us. But let me put it very bluntly. The predicament we found ourselves in, was even worse than taking a blind leap into the dark.

It has been said by some, that the Greek Cypriots voted against the Annan plan in the referenda of 24 April, because they may be comfortable with the status quo or because they don’t want to share their power and wealth with their Turkish Cypriot compatriots. It is an assumption that is far from the truth.

It has been repeatedly stated, in the most official way most recently before the UN General Assembly by President Papadopoulos, that in rejecting the UN Plan as a settlement for the Cyprus problem, the Greek Cypriots did not reject the solution or the reunification of their country, but they rejected that particular Plan as it was not achieving in an effective way the objective of a functional federation. At the same time assurances are given at the highest level, that the Greek Cypriot side remains committed to a bicommunal, bizonal federal solution that would ensure enjoyment of human rights for all Cypriots and the functionality of the state.

To use the words of the Ambassador of the Netherlands in his capacity as EU President during a speech in Nicosia last July and I quote “In the end, it [the plan] was rejected because one community did not feel comfortable with the specific terms of the proposed solution. It is this ‘people’s factor’ which in the final analysis determines the outcome of political efforts of negotiators. I believe that progress with the Cyprus-question lies with the Greek-Cypriot people and Turkish-Cypriot people themselves, even though they did and do need outside assistance. One community has rejected a specific blueprint for a solution, the other has accepted it. The Turkish Cypriots agreed, in their perception, to an acceptable risk of a common future. The Greek Cypriots rejected, in their perception, a solution which involved unacceptable risks to their future and did not do justice to their cause. Both outcomes are to be fully respected; they shape the parameters within which outside assistance can operate.”

Unfortunately, words are not always accompanied by deeds. While everybody accepts that it is the democratic right of the people to decide their future and any decision should be respected, some have launched an unprecedented campaign to punish the Greek Cypriot side for its stance in the referendum of 24 April and to reward the Turkish Cypriot side for its acceptance of the Plan. Those who have placed Turkey in the centre of their planning vis a vis their interests in the Middle East and the eastern Mediterranean region, turn a blind eye to the tragic realities imposed, contrary to international law, by the continuing presence of Turkish occupation troops in Cyprus .  Ignoring the fact that Turkey and the Turkish Cypriot leadership bear sole responsibility for the continuation of the isolation of the Turkish Cypriot community from the rest of the world, those who support the lifting of the so-called restrictions on Turkish Cypriots, embark on actions that solidify the partition of the island rather than facilitate reunification. Such are the moves supported by certain countries to open the ports and airports in the Turkish occupied area for direct trade or to incorporate in international fora a separate Turkish Cypriot representation. It must be underlined that the so called “isolation” of the Turkish Cypriots is nothing more than the consequence of the illegal occupation of part of Cyprus and their own refusal to implement established rules and principles laid down by the European Court of Justice.  Rule of law is fundamental to the European Union and all EU decisions and procedures are based on Treaties and on the acquis communautaire. Based on that principle, the Cyprus Government is doing whatever possible to ensure that any EU decision concerning the economic development of the Turkish Cypriots is taken within that framework.

It should be stressed that the Cyprus Government does not object to assistance aiming at the economic development of the Turkish Cypriots. As a matter of fact it has taken its own initiatives in that direction and last summer adopted a package of economic and social measures for the Turkish Cypriots, which is being implemented already, offering them tangible benefits. However, efforts to improve the economic situation of the Turkish Cypriot community, which the Cyprus Government fully supports, should not serve, in any way, as a pretext to promote the secessionist aims of their leadership. 

Let us look at some of the reasons that led the Greek Cypriots in such large numbers to reject the proposed solution.

The Annan V Plan failed to adequately address serious concerns of the Greek Cypriot community, such as the question of the Turkish mainland settlers, the permanent stationing of Turkish military forces in Cyprus and the expansion of the guarantor power’s rights with the inclusion of an additional protocol. Although elaborated in the many documents submitted by the Greek Cypriot side during the talks, those concerns were ignored by those who conducted the negotiations. Let me give you a few examples in order to demonstrate my point.

• The issue of the right of intervention under the Treaty of Guarantee was of paramount importance to the Greek Cypriot side in view of the fact that Turkey invoked that right to invade Cyprus in 1974. However, the UN interlocutors refused, during the negotiations, to discuss that issue. 
• A plethora of preconditions substantially limited the exercising of the right of the Greek Cypriots to have their property reinstated.
• Most notable are the benefits that Turkey receives from the Annan Plan, the greatest of which was secured to the detriment of both Greek Cypriots and Turkish Cypriots which was the stationing of Turkish troops on the island in perpetuity.
• On the issue of territory, while the Turkish side avoided, for obvious reasons, to submit proposals, when the percentage of displaced persons that would return to their homes in the area under Turkish Cypriot administration was further decreased by 3 per cent, it was expected that the UN would have dealt with the issue.
• On the issue of settlers it must be stressed that under the final Plan, not only were all of the settlers to remain in Cyprus with the possibility of a permanent flow of settlers from Turkey left open, but all of them were allowed to vote during the referendum. This was the case, despite established international law and UN practice, and the repeated calls from our side to the contrary, which were completely disregarded.
• On functionality, it should be underlined that this key element covered all areas of the operation of the state and did not only concern the composition of the presidential council or the setting up of a court of Primary Federal Jurisdiction. It is doubted whether the Plan was compatible with the Acquis Commmunautaire as it failed to enable Cyprus to function effectively within the EU as a member state.

The implementation of the Plan, especially concerning those provisions of crucial interest to the Greek Cypriots, would have been dependent on Turkey ’s good will, something it has not shown for more than thirty years, even for the simplest issues of a pure humanitarian nature such as that of those missing since the 1974 Turkish invasion. One should also point out the absence of any substantial negotiations as the Turkish side did not engage in any serious give and take with the Greek side and counted on the mediation of the Secretary General at the end of the agreed framework.

In the aftermath of the 24 April referenda and almost six months after Cyprus ’s accession to the European Union, it is perhaps time to consider where Cyprus stands at the moment both in terms of its  EU participation and in terms of a political settlement. Is Cyprus now in a worse or better position with regard to efforts for reaching a negotiated settlement? Was the Annan Plan the last opportunity for solving the Cyprus problem? Regarding the first question, it seems to me that Cyprus has avoided the worse. Now as a full member of the European Union is in a good position, and may be in a better one, to negotiate a fair settlement of the Cyprus problem. Concerning the Annan Plan it would be, in my view, a terrible mistake to consider it as the one and only blue print for a settlement in Cyprus or as the only one providing for a federal solution. In politics and diplomacy there is no such thing as “a last effort to win the peace”. Negotiations should continue in order to achieve a mutually acceptable solution. Whether they will result in an Annan 6 or 7 or something else, is not relevant. Certainly, any new effort will have to draw from what has been achieved so far but should also keep its distance with all that was unacceptable.

Apparently, in the current phase, there seem to be a number of factors conducive to a settlement.

One important factor is Cyprus ’s membership in the European Union. It is obvious that Cyprus today is in a stronger negotiating position than before.  This position can be enhanced further by the solidarity and support that comes as part and parcel of the European Union and which has been one of its greatest achievements. Evidence of this, are the discussions in the European Council-in which Cyprus participates - on the regulations concerning Turkish Cypriots for which the positions of the Cyprus Government are widely accepted.

It is important that I remind you that according to the accession treaty the State of the Republic of Cyprus becomes a full member of the European Union while in the absence of a settlement, the application of the acquis to the northern part of the island is suspended, until a final settlement is reached. This simply means that on May 1^st Cyprus acceded into the EU as a whole. This is a very important decision which combined with Turkey ’s aspiration to become a member of the EU, could act as a catalyst in future efforts to find a settlement. It provides incentives for all parties involved to keep focused on the goal of reunification and not the continuation of the status quo or secession.

Another important factor is the recent positive decision of the European Commission for Turkey . On October 6 the European Commission issued its recommendation on Turkey ’s progress towards accession considering that Turkey fulfills, though problems persist,  the political criteria and recommending that accession negotiations begin. In the long negotiating process that lies ahead, Turkey ’s commitment to European standards, human rights and respect for the rule of law will be put to a test. In this open-ended process, Turkey ’s stance towards Cyprus will also be tested. Maintaining occupation troops on European soil and insisting on anachronistic demands, could jeopardize the successful conclusion or risk suspension of its accession negotiations. For some time Turkey insisted on excluding Cyprus from the extension of its customs union agreement, only to announce  a few days ago that it would  extend such an agreement to Cyprus. On its way to Europe Turkey’s unjustifiable hostile policy against Cyprus on issues like the use of the Turkish veto against the accession of Cyprus to a number of technical international organizations e.g. the OECD or the prohibition of Cypriot ships approaching Turkish ports, will have to change. 

Our view is that Turkey may have a European future and a vocation to become a member of the EU, but there are political and economic problems which must be solved beforehand. We appreciate the political, military and economic importance and significance of Turkey for Europe, for the US and NATO, and the considerations behind this policy of embracing Turkey . We have in principle no reason to object Turkey coming closer to Europe . Objectively speaking, Cyprus may more than anybody else have interest in making its powerful neighbor behave in accordance with European values and standards.

As President Papadopoulos said during his address to the UN General Assembly, the new context defined by the accession of Cyprus to the EU and by the expressed will of Turkey to advance on the European path offers a unique opportunity and could have a catalytic effect in reaching a settlement in Cyprus as our vocation is to be partners with Turkey and not enemies.

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