CYPRIOT LEADERS MEET, AGREE ON NEXT (BABY) STEPS

C O N F I D E N T I A L SECTION 01 OF 03 NICOSIA 001088

SIPDIS

C O R R E C T E D COPY (TEXT PARA'S 1 AND 7)

SIPDIS

E.O. 12958: DECL: 07/10/2016
TAGS: PGOV PREL EUN UNFICYP TU CY
SUBJECT: CYPRIOT LEADERS MEET, AGREE ON NEXT (BABY) STEPS

REF: A. NICOSIA SIPRNET DAILY REPORTS (7/3/06 AND 7/7/06)


B. NICOSIA 838

C. SCHLICHER-SILLIMAN EMAIL (7/7/06)

D. NICOSIA 294

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Classified By: Ambassador Ronald L. Schlicher, reasons 1.4. (b) and (d)
.


1. (C) SUMMARY. On July 8, Turkish Cypriot and Greek Cypriot
leaders meeting with U/SYG Gambari reached agreement on a
"Set of Principles" and immediate next steps to get the
stalled Cyprus settlement process moving again. Working with
the UN, the two sides will engage in technical talks on
day-to-day matters, as well as parallel "substantive"
discussions on matters relating to a final settlement. The
communities will also discuss possible confidence building
measures to improve the atmosphere between them. Both
leaders have spun the agreement as a victory in public, but
Greek Cypriot and Turkish Cypriot officials are sounding a
more cautious tone in private. Disagreements over which
items should be on the substantive agenda persist and it is
unclear what will happen if the two leaders have not agreed
on the substantive agenda by the end of July. If the Gambari
agreement is to produce results, both leaders will need to
show unprecedented flexibility -- unlikely unless both Ankara
and Athens actively press their Cypriot cousins for a
successful process. END SUMMARY.

TALKS ABOUT TALKS
--------------


2. (C) A July 8 meeting between President Papadopoulos,
Turkish Cypriot leader Mehmet Ali Talat, and UN U/SYG Ibrahim
Gambari produced a break-through of sorts, with the two
leaders agreeing to a "Set of Principles" and some immediate
next steps designed to kick-start the stalled Cyprus
settlement process. The meeting, which was the first
settlement-related contact between the two leaders since
before the failed 2004 Annan Plan referenda (ref a),was
contentious and difficult, according to a UN source -- who
privately reported that the Secretary General had to
intervene by phone to resolve a last-minute, "deal-breaking"
disagreement (she did not specify on what topic).
Nonetheless, the two leaders (who had kicked their aides out
of the room for the three-hour, closed-door session) appeared
side-by-side afterwards, smiling and shaking hands as Gambari
announced the agreement.


3. (SBU) The agreement (the full text is being faxed to
EUR/SE),outlines a five-part "Set of Principles" that
include:

-- 1) Reiteration of their commitment to a bizonal,
bicommunal federation based on "political equality as set out
on the relevant UNSCRs";
-- 2) Recognition that the status quo is unacceptable and not
in the interests of either Greek or Turkish Cypriots;
-- 3) Commitment to the proposition that a settlement is
possible and desirable and should therefore not be delayed;
-- 4) Agreement to move ahead with bicommunal talks on
day-to-day issues that "affect the lives of the people" and,
concurrently, with bicommunal talks on substantive issues,
both of which will "contribute to a comprehensive
settlement," and;
-- 5) Commitment to put an end to the "blame game" and insure
the "right atmosphere" for a successful process, and as part
of this, recognition that additional confidence building
measures (CBMs) are "essential."

It also contains a "decision by the two leaders" to start the
talks on day-to-day issues by the end of July 2006 provided
that, at the same time, Papadopoulos and Talat also exchange
a list of substantive issues, the contents of which will be
studied by expert bicommunal working groups and finalized by
the two leaders. Finally, Papadopoulos and Talat agreed to
meet again "from time to time as appropriate to give
directions to the bicommunal working groups and review the
work of the Technical Committees."


4. (C) The agreement contains something for everyone. The
inclusion of a "substantive" track, parallel to the technical
one, appears to be a victory for the Greek Cypriots, since
Talat (fearing that he would be pressured into piece-meal
concessions - ref b) had opposed broadening proposed
technical talks to include settlement-related issues. For
their part, the Greek Cypriots agreed to a reference to
"political equality" and accepted to discuss confidence
building measures -- an idea Talat had pushed with Gambari
earlier. Perhaps most interesting, however, is the agreement
of the two leaders to meet again as needed to help move the
process along -- and the implication that they could now be
on the hook to ensure progress was made. UN sources told us

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privately that prior to their joint meeting, Gambari had told
both leaders that they had to stop stalling and come up with
ways to get the process moving (ref c).

LET THE SPINNING BEGIN
--------------


5. (C) Both sides have gone into spin mode to proclaim this
agreement as both a positive development and a victory.
Turkish Cypriot press gave the Papadopoulos-Talat agreement
breathless coverage in the context of a remark in which Annan
reportedly said he wanted to solve the Cyprus problem by the
time he leaves office at the end of this year. In private,
however, Talat aides expressed doubt that the agreement will
produce significant movement -- much less a serious
breakthrough -- toward settlement. In public remarks, Talat
balanced optimism with caution, stating that he was pleased
with the agreement, despite the inclusion of
"substantive issues." He went on to reiterate that that the
Turkish Cypriots would approach the discussion of substantive
issues "in the framework of the Annan Plan."


6. (C) Although Papadopoulos publicly cautioned that more
difficulties lie ahead, other GOC officials underlined that
the content of the July 8 text was very close to the February
"Paris Agreement" (ref d) between Papadopoulos and Annan,
which they claim laid out a similar two-track approach to
issues of substance and of day-to-day concern. Meanwhile, in
a July 10 briefing to the diplomatic corps, the MFA's Cyprus
Question Division Chief Erato Marcoullis stressed that the
apparent concessions to the Turkish Cypriots were not, in
fact, concessions. She pointed out that "correct
interpretation" of "political equality based on UNSC
resolutions" did not include numerical equality between the
two communities (aficionados can refer to UNSCR 716 for more
details). Marcoullis also noted that Talat's proposed CBMs
were "incomplete" and "indicative," constituting little more
than a rehash of a more "comprehensive list" that
Papadopoulos had presented in July 2004 -- and resubmitted to
Talat on July 8 to include the GOC's ideas on
Varosha/Famagusta/direct trade. Still, Marcoullis agreed
that there was at least some "overlap" between the two sides'
proposed CBMs (such as the opening of more Green Line
crossings),cautiously suggesting that the recent agreement
to consider CBMs opened "avenues for progress."


7. (C) Perhaps most importantly, Marcoullis stressed the
stipulation that technical talks and substantive talks would
be "concurrent," something other GOC officials have also
underlined in their statements. In a reversal of her
government's aversion to "asphyxiating timelines," Marcoullis
insisted that the agreement between the two leaders
stipulated that the lists of substantive issues must not only
to be exchanged for study by the end of July -- but that the
bicommunal working groups (which do not yet exist) would need
to complete their study of the lists, and the leaders would
also need agree on them, by that time. (COMMENT: SRSG
Moller's deputy had a different understanding of this
provision when she met with us, and suggested that although
the exchange of lists would have to happen by July,
discussion of their content might continue beyond that date.
END COMMENT.) Progress on day-to-day matters was linked to
progress on substance, Marcoullis stressed, and one track
would not move forward without the other.

COMMENT: MILES TO GO BEFORE I SLEEP
--------------


8. (C) Even a simple face-to-face meeting and a modest
agreement are more than many people expected Gambari could
accomplish on his trip to the island. The July 8 agreement
focuses exclusively on the next baby steps needed to restart
the settlement process, but nonetheless represents a
departure from the previous two years of deadlock, which have
been characterized by name-calling, refusal to meet, and
petty disagreements over protocol and terminology. Gambari's
private message to both sides -- that the next SYG would not
put Cyprus as high on his agenda as Annan had, and that the
UN would not hesitate to point fingers if the process
collapsed -- appears to have focused the minds of both
Papadopoulos and Talat. Neither want to be blamed for a UN
flame-out, so an agreement like this, which commits them to
meet again and take personal responsibility for progress on
talks and agendas, is a good thing.


9. (C) Nonetheless, the Gambari agreement faces serious
difficulties in its implementation. Even though they have
agreed to discuss both substance and day-to-day issues, the
two sides appear no closer to agreement on what those issues
should be -- or on how they should be discussed. Talat's
repeated insistence on using the "Annan framework" for
substantive discussion will certainly clash with the Greek

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Cypriot desire to take a "piece-meal" approach by first
tackling issues like settlers and the economy. Meanwhile,
questions like Varosha (which is a CBM for the Greek
Cypriots, and a substantive issue for the Turkish Cypriots)
or demining (which involves equities of the famously
inflexible Turkish army) are also no closer to resolution.
If the Greek Cypriots insist on total agreement by July 31 on
what should be on the substantive agenda, the process may
stall or even fail. This, according to Moller's deputy, may
be a case where quiet pressure from Athens could help.
Similarly, if Ankara does not give Talat room to maneuver in
the coming weeks, he could be painted as the intransigent
party. If the Gambari agreement is to get the settlement
process moving again, both sides need to hear encouraging
messages from their mainland cousins, as well as positive
pressure to move forward from the broader international
community. END COMMENT.
SCHLICHER