Ex-Cypriot President Talat attacked

NICOSIA

Downer has played a crucial role in Cyprus from 2008 amid efforts to resolve the longstanding dispute. AP Photo

Greek Cyprus’s economic crisis could hasten a deal to end decades of enmity between the island’s estranged Greeks and Turks, its outgoing United Nations envoy said March 27.
 
Reunification talks resumed between the two sides on Feb. 11. Peace prospects have come into sharper focus after the discovery of substantial natural gas reserves in the eastern Mediterranean, and the need for routes to export the commodity to Europe. A deal in Cyprus could enable gas to be piped via Turkey, easing Europe’s reliance on Russian gas. “Do the math. If Cyprus were reunited it would lead to substantial investments to the island,” Alexander Downer, U.N. special envoy since 2008, told journalists.

The south had to be bailed out last year by the European Union and the IMF after a banking sector collapse left it on the brink of bankruptcy.

The lenders anticipate that overall output will contract by about 10 percent before the economy begins to recover. The continuing dispute over the island is also a hurdle to Turkey’s ambitions to join the European Union.

“Economic circumstances, harsh as they are, can and have reminded people that a solution is beneficial for the island,” said Downer, a former Australian foreign minister, who steps down from his U.N. post next month. Preliminary findings of a survey into the economic benefits of a peace deal prepared by the PRIO peace institute forecasts that a settlement could add 18 billion euros to Cyprus’s economy over a 20-year period, boosting output by an average 3.8 percent per year.