FM BAKOYANNIS DISCUSSES TURKEY-EU-CYPRUS AND

1. (C) SUMMARY: FM Bakoyannis told Ambassador June 5 that
she would sound out Turkish FM Gul, at a meeting later this
week in Istanbul, on opening up the Turkish Cypriot port of
Famagusta for direct trade in return for the nearby area of
Varosha being given back to its Greek Cypriot owners. Aware
of the potential train wreck with the EU for Turkey's failure
to open its ports/airports to Greek Cypriot shipping, she
argued this would be a "win-win" situation for all. In the
aftermath of the May 23 fighter accident (ref), Bakoyannis
said she would also discuss extending a 1988 Greek-Turkish
agreement providing for a moratorium on Aegean training
flights for the months of July and August, and would ask that
the rest of June and September be included. Bakoyannis said
the two countries' CHODs were already discussing safer rules
of engagement for fighters, and this would be a discussion
point with Gul as well. END SUMMARY.

FM Agrees on Avoiding Turkey-EU Train Wreck


--------------------------





2. (C) At a June 5 meeting, FM Bakoyannis told Ambassador
that Turkey faces a "very difficult" situation both
domestically and vis-a-vis the EU regarding Turkey's EU
accession prospects. She highlighted, in particular, that
French Interior Minister Sarkozy was quite open in expressing
opposition to Turkey's potential EU membership, and said she
believed if Turkey became an issue in the French election
campaign, things would become even more "complicated." The
FM agreed with Ambassador that we must find a way out of the
potential train wreck this fall if Turkey should fail to
implement its promise to open its ports/airports to Greek
Cypriot shipping. The idea of postponing this decision via
Turkey referring the matter to the ECJ would only make things
worse, in the FM's opinion.

3 (C) The FM expressed concern about the situation inside
Turkey, and asked for our take. Ambassador responded that it
is not as bad as it looks. The recent assassination of the
state judge was a serious matter, but our Embassy in Ankara
was of the view the government would weather the storm.
Ambassador noted that U.S. relations with Turkey in recent
months had improved. The FM pointedly responded that
Greek-Turkish relations were not better, and that she was
worried about Greek public opinion becoming restless with a
rapprochement policy that had not produced much.

FM To Sell FM Gul on Famagusta-Varosha


--------------------------





4. (C) The FM proposed pitching FM Gul, with whom she'll
meet on the margins of a June 9-10 conference in Istanbul, on
the well-known offer of opening the port of Famagusta for
direct trade (under EU administration) in return for the
nearby area of Varosha being given back to its Greek Cypriot
owners. She argued this would be a "win-win" for all. To
speak just of opening Famagusta without returning Varosha
would "be impossible" for Cypriot President Papadopoulos to
accept. The FM noted that Greek Cypriot investment could
then flow into Varosha, providing jobs for Turkish Cypriots
and serving as an example of reunification. Asked whether
Ankara could accept returning Varosha right now, since it had
always held that it should be a final status issue, the FM
responded that just opening Famagusta for direct trade would
only strengthen partition because there would be no
interlinkage of the two communities. Bakoyannis dismissed
the notion of opening trade over the Green Line, saying it
would be impractical because of the need for the Greek
Cypriots to conduct phytosanitary and other controls on
arriving goods, undermining the political benefits.



5. (C) Asked what part of Famagusta, which serves the
Turkish military as well, would be left for this activity,
Bakoyannis said that the proposal concerns only commercial
aspects and that "we are far from discussing" military
matters. (Comment: We interpret the FM as signaling that the
Greeks envisage a sector of the port being set aside for
military cargoes outside of the zone of EU supervision. End
Comment.) Asked what next steps would be if Gul expressed
interest and what external partners could do to help,
Bakoyannis said she would let us know. She noted that Greece
is nearly alone within the EU in trying to help Turkey honor
its obligations -- most EU members just want Turkey to
implement the Protocol, and if that does not happen, then

ATHENS 00001450 002.2 OF 002


believe Turkey's application should be postponed.

Greek-Turkish Aegean CBMs


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6. (C) Set against backdrop of the May 23 fighter accident,
which resulted in the death of a Greek pilot (ref A),
Bakoyannis said she would also discuss with FM Gul the
extension of a 1988 memorandum between the then Greek and
Turkish FMs ("Papoulias-Yilmaz understanding") that provided
for a moratorium on military training flights in the Aegean
during the months of July and August. She added that she
would press for this agreement to include the rest of June
and September as well. The FM responded positively to
Ambassador's suggestion on the need for safer rules of
engagement between the sides' fighters, saying the Greek and
Turkish CHODs are already talking about this and that it
would also be a discussion point with Gul.



7. (C) Ambassador complimented her decision to go ahead
with her planned trip to Istanbul, despite negative public
opinion fallout from the fighter accident. Smiling wryly and
saying she's had enough people tell her not to make the trip
to Istanbul, Bakoyannis said she "hopes nothing happens"
during visit. In any event, the FM said she believes in
having as much face-to-face contact as possible with her
Turkish counterpart, since Gul "must know what our position
is." Asked about the possibility of a joint Greece-Turkey
referral of Aegean disputes to the ICJ, the FM again answered
that "we are very far away from that." She said the Turks
remain intransigent on this and PM Erdogan is not yet ready
to talk.
RIES