PARIS — For the first time since Cyprus joined the European Union nearly a decade ago, its partners have the leverage to press for a settlement of the island’s division of almost 40 years.
Yet there is no sign that Brussels is preparing to use its advantage to achieve a reunification that eluded negotiators when Cyprus joined the Union in 2004. Indeed, the most powerful member states, Germany and France, may be content to see the Cyprus stalemate continue rather than deal with the potential consequences of a resolution that would bring Turkey closer to E.U. membership.
The Republic of Cyprus, with its 800,000 Greek Cypriots, is broke. The country, one of the smallest economies in the euro zone, applied for financial aid from the Union and the International Monetary Fund last June after its banks were badly hurt by an E.U.-sanctioned write-down of Greek debt held by private investors.
The government says that without a bailout, it may run out of money in April. It needs about €17 billion, or $23 billion, from its euro zone partners, equivalent to the economic output of a whole year.
That ought to give Brussels leverage to push the Greek Cypriots into cooperating with the Turkish Cypriots in the north of the island to join in a loose federation of the kind proposed in 2004 by Kofi Annan, then the U.N. secretary general. At the time, the Turkish Cypriots voted in favor of the Annan plan, encouraged by Turkey.
Turkey invaded northern Cyprus in 1974 in response to a Greek-backed coup in Nicosia by Greek Cypriot hardliners seeking union with Athens. The island has been divided ever since. Turkey has about 30,000 troops in northern Cyprus. Under the Annan plan, most of them would have gone home by 2018.
But safe in the knowledge that they would be admitted to the Union no matter what, the Greek Cypriots rejected the Annan plan, and a week later Cyprus became an E.U. state. European officials, and especially Günter Verheugen, the E.U. enlargement commissioner at the time, felt betrayed.
“The understanding was quite clear when we gave Turkey candidate status in 1999 and even clearer when we concluded negotiations with Cyprus in 2002: The Greek Cypriots would not allow the peace plan to fail, and if it failed due to the Turkish Cypriots, then Cyprus could join,” Mr. Verheugen said.
“We came very close. The problem was that in the end, we didn’t have any leverage over the Greek Cypriots anymore since they knew they would join anyway,” added Mr. Verheugen, who is now honorary professor of European governance at the European University Viadrina in Germany.
The big losers were the Turkish Cypriots, who remain excluded from the Union and economically isolated. At the time, Brussels released some funds that had been pledged to the Turkish Cypriots for economic development and promised to allow them to export their produce directly to the Union. But the Greek Cypriots blocked direct trade with the Union. Turkey, in turn, refused to allow the Greek Cypriots direct access to its ports and airports.
At the least, the Union could use a bailout for Nicosia to try to secure direct trade access for the Turkish Cypriots, which might prompt the Turks to lift their own restrictions.
Yet some E.U. diplomats say it would be politically dangerous to apply diplomatic pressure by exploiting Cyprus’s economic plight. Any link could backfire and benefit hard-line nationalists on both sides, they warn. And skeptics say it suits Berlin and Paris just fine to keep the Cyprus problem in stalemate, because that prevents Turkey from advancing toward the Union’s door.
“Europe itself is divided on the Cyprus issue. There are several countries that have no interest whatsoever in solving the problem because Turkish accession would be moved forward,” said a former mediator on the island, who spoke on condition of anonymity because he is still involved in diplomacy.
Article source: http://www.nytimes.com/2013/02/05/business/global/european-unions-leverage-over-cyprus-is-ephemeral.html?partner=rss&emc=rss