Δευτέρα, 19 Αυγούστου 2013

The Solution of the Cyprus problem through the Troika Memorandum






The completion at long last of the consolidation of the Bank of Cyprus and the first positive assessment of the troika as regards the progress of the implementation of the memorandum so far, clearly lightens the atmosphere of gloom and doom that had  prevailed after the dramatic decisions of the Eurogroup of last March. The President of the Republic, exhibiting both persistence and patience and with the assistance of the Central Bank Governor Panicos Demetriades, Finance Minister Harris Georgiades and a few  technocrats, has managed to restore things to a manageable condition. No one can at this stage convincingly argue that we have successfully turned the corner  as yet, however it is obvious that as things now stand the government is able to start dealing with the Cyprus problem more actively and more seriously. We may recall in this context that  the President had cited August and September as months of preparation and October as the month of embarking on a new round of talks.

Change of scenery

What differentiates the current scene from the corresponding in 2004? The Republic of Cyprus is labouring under a memorandum
, with the troika  having the first and final say in the management of the economy of the country. As regards the Turkish Cypriots things have also changed. In 2004 they benefited from a regime of  quasi lavish subsidies from Ankara, in an effort to bring the Turkish Cypriots closer to the Greek Cypriots’  living standard. Today, the Erdogan government has put the north under a peculiar Turkish memorandum of sorts. This has meant inter alia the  freezing of wages in the public sector with the effect of manifest discomfort and  irritation in the occupied areas  which in turn was reflected in the recent elections.

The upshot of all this to my mind is that  the two communities now have  to seek creative solutions through a regime of austerity. The memoranda on both sides could conceivably be an important factor in the solution effort by introducing  new data in the situation and acting  as a catalyst in the rationalization and de- demonization of the Cyprus problem which has been in some ways a distorting mirror distorting our reality in this country for as long as most of us remember. 

Should this logic prevail and if the sterile nationalism and the phobias of the past which have brought us to the unacceptable situation we have are replaced by rationalism encompassing also our  new economic realities, this will be a positive development both for Greek Cypriots and Turkish Cypriots for the following reasons:

* The iron clad Memorandum binding the G/Cypriots  will compel them to think more seriously about the issue of the administration  of the federation. When discussing the Annan plan in an exhibition of nouveau riche   logic, there was talk of 60,000 federal civil servants. Today those numbers justifiably sound ridiculous when both communities need to make thousands of employees redundant so as not to sink government finances. The challenge today is to construct a small and efficient federal state, which through the principles of subsidiarity and proportionality will help both communities to grow more or less independently while they work in tandem and cooperate closely where it is for the benefit of the federal state to do so.

* In 2004 everyone spoke of the  inflow of billions  from  tenders by the EU and other donors for the  reconstruction and maintenance of immovable property. Today, in the midst of austerity, we need a flexible regime which will move within the EU for fundraising-through-leverage processes of the European Development Bank, private BOT agreements and inducements.

* In 2010 the  Christofias - Talat negotiations led to an agreement on the chapter of the economy in which there was talk of one central bank with temporary branches in the two states. Today this chapter should naturally  be seen through the establishment and operation of the ESM and the inclusion of all European banks' under direct supervision of Frankfurt.

* The Memorandum and inviolable commitments taken mainly by the Republic of Cyprus will compel the negotiating team of the United Nations to move away from the old-fashioned sense of the power game in Cyprus. The regional power of Turkey today can not be imposed on a country of the eurozone through unreasonable demands outside the acquis communautaire, nor of course can the internationally recognized status of the Republic  deprive the Turkish Cypriots of the right to political equality. The EU for its part cannot stand by its 2004 position that "anything decided by the two communities will be incorporated in the acquis communautaire" when the  acquis imposed on Cyprus today is absolutely specific with  provisions and obligations measured in billions. In brief, the full and complete integration of Cyprus through a hard Memorandum in the eurozone will preclude  the EU’s playing the role of just an observer in Cyprus. Instead, it will be a necessary requirement for EU  to engage actively and decisively to resolve it. In this context the UN will also have to seriously engage in actively considering for the first time the real needs of the Turkish Cypriots and not the geopolitical interests of Turkey.

Growth

The key word today for both communities, apart from rationalizing the processes for the solution of the Cyprus problem is growth. Both communities have hit rock bottom financially, so it's probably easier to have consensus and synergies to escape the crisis. The solution is the safest route to be rid of the memoranda. How can this be achieved?

* The return and reconstruction of Varosha and Morphou and the need to build new settlements for all Turkish Cypriots  who will need to move elsewhere as part of the solution will reestablish the construction industry as one of the engines driving the economy forward.

* The reunification of the market and its augmentation by the addition of 250,000 Turkish Cypriots brings the number of consumers at one million to benefit all Cypriot companies.

* The solution of the Cyprus Problem will open the market of 80 million inhabitants of Turkey for Cypriot businessmen, while many Turkish grandees ( analogous to the Russians) may prefer to have their basis in a European country.

* The stability and security that will result from a solution will attract serious investment and will provide important new impetus to the growth of tourism.

* Finally, the solution will bring out Cyprus as the only state in the region with zero problems with its neighbours in the Eastern Mediterranean, making it easy for Cyprus to become an energy center for LNG sale and also hub for the transportation of natural gas through a pipeline system through Greece and Turkey.

Our Perspective

In brief, the vista opening up through a solution of the Cyprus problem today are more than visible and significantly better than they were in 2004 when  the Greek Cypriots with their illusions of permanent economic power fell prey to the manipulations and propaganda of self serving politicians and their myopic fellow travellers who controlled the economy of the country with disstrous consequences even for those who were directly involved in these machinations, hence my choice of “myopic” as an adjective . Today I have the impression that that Greek Cypriots are much less naïve .more suspicious and too wise  to make the same mistake again.

 Dionysis Dionysiou*
* Edition counselor of Politis Newspaper
dionisis.dionisiou@politis-news.com
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