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Dec 7, 2015 | 10:35 GMT

8 mins read

Cyprus Makes Progress on Reunification Talks

Cyprus Makes Progress on Reunification Talks
(ANDREW CABALLERO-REYNOLDS/Getty Images)
Forecast Highlights

  • Greek and Turkish Cypriots are getting closer to an agreement on reunifying the island of Cyprus, but lingering obstacles will likely delay any deal for at least a year. 
  • The ongoing reunification negotiations will make Cyprus less likely to use its veto power to impede progress in Turkey's accession talks with the European Union.
  • A reunification deal would enable Cyprus to proceed with plans for exploiting offshore natural gas reserves and would make it easier for it to export natural gas to Egypt and Europe.

Cyprus is closer to reunification than it has been in some time. Negotiations between the governments of the internationally recognized Greek republic in the south and the Turkish north gained momentum in September, and officials in northern Cyprus said there could be an agreement as early as May. 

The recent improvement in relations between the two parts of the island — divided since 1974, when Turkish forces invaded the north after a Greek-sponsored coup — is the result of political efforts by the Republic of Cyprus' president, Nicos Anastasiades, and his Turkish Cypriot counterpart, Mustafa Akinci. The two leaders agreed to discuss the creation of a bizonal federal state that would respect the existing majorities of Turks in the north and Greeks in the south. During the early stages of reunification, the island would be under external supervision from entities like the European Union and the United Nations.

The two sides are also interested in the economic benefits of reunification. The island has been beset with financial difficulties, with the Republic of Cyprus receiving a bailout from the European Union and the International Monetary Fund in 2013. A recent study by the Cyprus Centre of the Peace Research Institute Oslo stated that reunification would increase Cyprus' per capita income by about 1,700 euros (about $1,860) in the first five years alone. Reunification would also benefit the island's tourism sector and create new jobs, allowing it to put economic crisis behind it. 

The desire to exploit energy reserves is another factor behind the push for reunification. Cyprus has significant natural gas resources, but political frictions have hampered their development. The Cypriot government has focused on the Aphrodite field in the south (believed to contain some 4 trillion cubic feet of natural gas), with Egypt the main destination for natural gas exports. But Turkey does not recognize Cyprus' right to exploit its exclusive economic zone, an area within a maritime boundary that includes the Aphrodite field. Resolving the Cypriot standoff would make exports to North Africa easier, and also open the door for Cypriot natural gas to reach Europe. While building a pipeline to Europe would be technically and financially difficult, the main challenge has been political, since the pipeline would have to cross the Turkish-controlled part of the island.

Foreign actors are also pressing for an agreement. After visiting the island Nov. 19, British Foreign Affairs Secretary Philip Hammond said that "the stars are beginning to align" for reunification and that the United Kingdom and European Union will provide financial support for a deal if need be. London's support is crucial because the United Kingdom has military bases in Cyprus. German Foreign Affairs Minister Frank-Walter Steinmeier also visited Cyprus in November, offering bilateral and European-level support for the negotiations. And U.S. Secretary of State John Kerry visited Cyprus on Dec. 4, meeting with representatives of the two administrations.

Unfinished Business

Despite domestic and foreign interest in the reunification of Cyprus, significant problems remain. The most complicated issue is how to compensate people on both sides of the island forced to leave their homes after the Turkish invasion.

Greek Cypriot and Turkish Cypriot negotiators have agreed to create an independent commission to study solutions, but its task will be very complex. Returning land and other property lost four decades ago seems impossible, so the most likely solution would involve monetary compensation. But in addition to settling on a value for lost properties, the two sides would have to fund the restitution.

The status of foreign military troops in Cyprus is similarly problematic. Turkey and Greece keep troops on their respective sides of the island, and the United Kingdom has military bases in Cyprus. Making matters more complex, a 1960 agreement gives the United Kingdom, Greece and Turkey the right to intervene militarily in the island's affairs. Cyprus' strategic location in the Eastern Mediterranean makes London, Athens and Ankara unwilling to surrender their military presence on the island.

The situation of Turkish settlers in northern Cyprus is yet another contentious matter. In the 40 years since the Turkish invasion, some 250,000 people have emigrated from mainland Turkey to northern Cyprus. These families tend to be more conservative than their Turkish Cypriot neighbors and generally more supportive of a two-state solution than of a federation. The status of these settlers post-reunification is among the many legal issues the negotiators will have to determine.

The Role of External Players

The political situation in Greece and Turkey will also affect negotiations. The Greek government is a key ally of the Republic of Cyprus, and does not recognize the Turkish administration in the north. While Athens does support the idea of creating a federal state in Cyprus, it demands the complete withdrawal of Turkish troops from the island.

In Turkey, President Recep Tayyip Erdogan has tried to reduce the influence of the military in domestic politics. This could allow Ankara to support a reunification plan that includes the withdrawal of Turkish troops from Cyprus. The November elections in Turkey removed an important stumbling block to Cypriot reunification: The victory of Erdogan's Justice and Development Party allowed it to form a government without the Nationalist Movement Party, which opposes reunification. Now that election season is over and Turkey has a stable government, Ankara is in a stronger political position to advance reunification negotiations.

Meanwhile, the refugee crisis opens the door for an understanding between Cyprus, Greece and Turkey. The Greek government wants Turkey to help reduce the influx of asylum seekers entering Greece. The European Union and Turkey reached a deal Nov. 29, on measures to improve border controls and fight human trafficking groups in Turkey in exchange for resuming negotiations over Turkey's EU accession and lifting visas for Turkish citizens visiting Europe. Turkey recognizes its significant leverage over the European Union thanks to the migration crisis, but must still contend with the Cypriot government's veto power over EU-Turkey accession talks. Thus, the more progress Ankara makes in the negotiations over Cyprus, the more progress it will make in the accession talks.

But the refugee crisis also complicates matters by strengthening nationalist parties in Greece. The obvious example is the far-right Golden Dawn party, which is currently the third-largest political force in Greece. The immigration crisis could also harden the position of the Independent Greeks, a nationalist party that is currently a junior member of the Greek government coalition. A more nationalistic Greece could well oppose an agreement with Turkey over the reunification of Cyprus.

The Future Is in Cypriot Voters' Hands

Even if an agreement were reached, northern and southern Cypriots would have to approve it in a referendum. In a similar 2004 vote, Turkish Cypriots approved a reunification plan but Greek Cypriots rejected it. Therefore, the main challenge for the current negotiators is to reach an agreement acceptable to the two governments and the two populations.

The largest parties in the Republic of Cyprus, the president's Democratic Rally party and the opposition Progressive Party of Working People, support the current reunification efforts. This means legislative elections in May should not substantially change the political environment in the south. If a referendum is organized, combined support from the two parties should create a strong campaign in favor of the agreement and contain smaller parties' opposition to reunification. But voters still may not follow the official party lines: The 2004 referendum showed that support from the main political parties in the Republic of Cyprus might not be enough to convince voters to ratify a deal.

At this point, the suggested May date for a referendum is not realistic. Northern and southern Cypriots will continue to negotiate, but reunification is unlikely in 2016. Before an agreement is reached, there will likely be compromises over reparations for displaced Cypriots and over the presence of foreign armies on the island. The two sides will also have to agree on what the new federation would look like and how the two communities would be represented. After that, a referendum will have to take place, and a constitution will have to be written. So while the stars may be close to aligning for Cyprus' reunification, the island's status is unlikely to change in the near term.

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