Time for a decision for Cyprus talks

Turkey and Turkish Cypriots are pressing hard. The U.N. secretary-general’s special envoy Alexander Downer will be gearing up his efforts with visits to Ankara, Athens and Cyprus soon. Britain and the United States are in favor of a quick resumption of the Cyprus talks. Yet, since there is a need for two to tango, the dance season will open only when Greek Cypriot leader Nikos Anastasiades feels he can deal with something other than the economic disaster he inherited from socialist Demetris Christofias.

Expecting Russia, France or others in love with the Greek Cypriot side for this or that reason to wake up all of a sudden from their platonic romance would be unrealistic. The radical haircut Russian deposits suffered in the Greek Cypriot banks as part of the bailout plan with the EU and the IMF was very painful for Moscow. Yet, forget abandoning Greek Cypriots, will Moscow lift its embargo on the release of the 2004 report of the U.N. secretary-general on his peace plan that was dumped by Greek Cypriots and approved by the Turks in separate referendums? No way.

Could the Greek Cypriot state offer Russia anything further than temporary access to its air or naval bases? Can it allow Russia have a full-fledged base with full control on Cypriot territory to replace for example the Tartus naval base on the Syrian Mediterranean coast? Such “options” indeed were discussed during former Finance Minister Michael Sarris’ visit to Moscow in March, but nothing came out.

Now, the bailout package was inflated with a further 6 billion euros to 23.5 billion euros and the amount of money Greek Cypriots were to raise increased from around 7.5 billion euros to 13.5 billion euros. This would mean new taxes, tighter public sector expenditures and of course privatization. Selling “excessive” gold reserves might produce some 400 million euros, that’s all. A further haircut of bank deposits appears unavoidable. Tourism season is opening. Like previous years hopes pinned on an increased number of Russian tourists. Will they come at least in the numbers hoteliers and the Anastasiades administration hope after the not-so-pleasant haircut their money in Greek Cypriot banks had? Offering Cyprus passports in compensation to Russian depositors who lost at least 3 million euros in Cyprus banks might be an indication of the frustration Anastasiades is in.

Most probably waiting for better times to resume U.N.-sponsored Cyprus intercommunal talks will be something like praying for water in the Sahara desert. All indications show that things will get worse at least for the next two years. Hoping for gas revenues would as well be a romantic undertaking as even if there were no problems with Turkish Cypriots and Turkey on offshore hydrocarbon resources, how would it be exported to European markets? Pipeline to Greece? Really? Building an LNG terminal? At a fraction of such costs Cyprus gas can be connected to the Turkish, thus European network. Besides, Turkey and Israel have started to patch up. Israelis might not be on board for a LNG plant on Cyprus while there is the Turkey pipeline option, particularly in view that Turkey indeed would be the prime buyer of Israeli gas.

The new Cyprus process, however, may start immediately with a confidence-building measure: Anastasiades’ agreeing to lift the Greek Cypriot veto on direct trade between the EU and Turkish Cypriots, opening the Ercan airport to international flights and Turkey opening its ports and airports to Greek Cypriots. It is high time.