Identifier
Created
Classification
Origin
06NICOSIA273
2006-02-27 16:04:00
CONFIDENTIAL
Embassy Nicosia
Cable title:  

CYPRUS REACTS TO EU AID PACKAGE FOR TURKISH

Tags:  PREL PGOV UN EUN TU CY 
pdf how-to read a cable
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P 271604Z FEB 06
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TO RUEHC/SECSTATE WASHDC PRIORITY 5613
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 0464
C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000273 

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/28/2016
TAGS: PREL PGOV UN EUN TU CY
SUBJECT: CYPRUS REACTS TO EU AID PACKAGE FOR TURKISH
CYPRIOTS

REF: LIBBY-MARCIEL-SKINNER EMAIL (6/17/05)

Classified By: Ambassador R. Schlicher, for reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000273

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/28/2016
TAGS: PREL PGOV UN EUN TU CY
SUBJECT: CYPRUS REACTS TO EU AID PACKAGE FOR TURKISH
CYPRIOTS

REF: LIBBY-MARCIEL-SKINNER EMAIL (6/17/05)

Classified By: Ambassador R. Schlicher, for reasons 1.4 (b) and (d).


1. (C) SUMMARY. The EU's decision to approve its
long-awaited 139 million euro aid package for the Turkish
Cypriots has been welcomed as a triumph of diplomacy on the
Greek Cypriot side. GOC contacts note that the shape of the
aid package -- as well as the content of an accompanying
declaration -- "meets all our requirements." The Turkish
Cypriots, however, are bitter that the EU has "given into
Greek Cypriot pressure" over aid, even as Talat's staff
privately admit that the accompanying declaration is "not as
bad" as what had been proposed by the Commission in late

2005. While apparently unwilling to block implementation of
the EU's assistance money, the Turkish Cypriots feel the aid
will not contribute to the development of their economy
absent direct trade, which remains on hold. They also expect
the GOC to use its concerns over Greek Cypriot property in
the north to limit the scope of EU assistance projects.
European diplomats here generally welcome the passage of this
aid package as an end to a long-running EU institutional
headache. While the deal will give the Turkish Cypriots an
opportunity to strengthen their still-nascent relationship
with the EU and its myriad institutions, the immediate
beneficiary is Tassos Papadopoulos. The Cypriot President is
using the agreement both to burnish his image and strengthen
his hand in advance of his February 28 meeting with UNSYG
Annan. The Turkish Cypriots, meanwhile, are expressing fears
that their "flexible" approach to the Greek Cypriots and the
EU has brought them nothing but grief. END SUMMARY.

GREEK CYPRIOTS GLOAT
--------------


2. (C) The EU's decision to pass the long-delayed assistance
package for the Turkish Cypriots has been welcomed as a
diplomatic triumph in the south. One MFA contact noted to us
that the package "meets all our requirements," pointing to
provisions which mandate "consultation" with the ROC over
implementation of aid projects, especially where such

projects "might affect property rights" -- as well as an
annex stipulating that the EU office overseeing assistance
would be located in the south.


3. (C) In public, however, the biggest news has been language
in the accompanying declaration linking further measures for
the Turkish Cypriot economy to issues "that formed the basis
of consultations held under the Luxembourg Presidency." This
is a reference to June 2005 talks held between the two
communities (ref email),in which the Luxembourgers tried,
and failed, to broker a deal that would have given the
Turkish Cypriots aid and some liberalization of trade with
the EU (perhaps even direct trade) in exchange for some
combination of a property moratorium and the
renovation/return of Varosha.


4. (C) Despite his insistence that he was "neither bragging
nor celebrating," Papadopoulos celebrated the February 24
COREPER decision, bragging that finally "the issue of the
return of occupied Famagusta to its lawful inhabitants had
come under the realm of the European Union."

TURKISH CYPRIOTS GRUMBLE
--------------


5. (C) The Turkish Cypriots, however, feel that by passing
its assistance package without the direct trade measures
originally conceived to go with it, the EU has once again
"given in to Greek Cypriot pressure" and guaranteed that its
aid package will have little positive impact on the Turkish
Cypriot economy. In private, Turkish Cypriot officials
acknowledge that this official decoupling of trade and aid
has come as no surprise to them, but nonetheless are angry
that the EU-25 have agreed to an aid package "filled with
concessions to Papadopoulos." In a press release,
"President" Talat's office focused on the accompanying
declaration, saying it did "not consent" to its content and
criticizing the reference to the Luxembourg talks as a
"possible loophole through which UN issues could be dragged
onto the EU platform."


6. (C) Nonetheless, Talat's U/S Rasit Pertev (please protect)
suggested to us that the Turkish Cypriots had decided not to
block the actual implementation of the aid measure, which
"would cause us more trouble" than it was worth. Although
the Turkish Cypriots felt they "had to go on record" with
criticism of the aid, the EU's reference to the Luxembourg
talks was "vague" and "not as bad as it could have been"
because it made no specific mention of "unacceptable" Greek
Cypriot demands from the Luxembourg talks -- a unilateral

NICOSIA 00000273 002 OF 002


freeze on property development and the return of Varosha.
Pertev was still angry, however, that the final aid package
had been agreed to "over our heads." He was certain that the
Greek Cypriots would see to it that property concerns and
other "political" considerations would limit the scope of
specific aid projects to the point that European assistance
would be economically meaningless.


7. (C) By passing aid in a form that met Greek Cypriot
demands, Pertev suggested that the EU was inviting further
Greek Cypriot hardball tactics -- and slowly painting Talat
into a corner. The Turkish Cypriots already regretted their
decision to "show flexibility" during the Luxembourg talks by
agreeing to discuss settlement-related issues outside a UN
context again. They would "never ever ever" agree to discuss
such issues in an EU context. The Turkish Cypriots "were
still paying the price" for their decision to do so last year.

COMMENT
--------------


8. (C) European diplomats here, including the British (who
usually see eye-to-eye with us on Cyprus issues),have
welcomed the EU aid agreement and praise the Austrian
Presidency for defusing this long-running institutional
headache. Indeed, the Austrians do deserve credit for
walking the Greek Cypriots back from the demands they made in
late 2005, when the GOC insisted on an accompanying
declaration that explicitly mentioned Varosha and property.
Furthermore, even a limited aid program will benefit the
Turkish Cypriots -- even if it is politically inconvenient
for Talat -- by deepening and institutionalizing the
community's ties with European institutions.


9. (C) Nevertheless, the biggest beneficiary of the EU aid
program, at least in the short run, is likely to be Tassos
Papadopoulos. Having secured a politically useful
declaration -- and effectively watered down key elements of
the aid package -- Papadopoulos can now play the role of
magnanimous statesman by allowing assistance to move forward.
This strengthens his hand in advance of his February 28
meeting with UNSYG Annan. Even as he has given little
indication that he is ready to move forward with real
give-and-take on substantive matters relating to the Cyprus
problem, Papadopoulos may hope that this gesture will help
prod Annan into taking a more active role in the Cyprus
problem -- which the ruling DIKO-AKEL coalition would like to
see before legislative elections in May. In addition to this
"positive" GOC gesture, last week's Turkish refusal to allow
a Greek Cypriot ship to dock in Mersin has also let Tassos go
into the Annan meeting looking "the good guy."


10. (C) The Turkish Cypriots view the tortured process that
led up to today's aid decision as a lesson in the dangers of
showing "flexibility" toward the current Greek Cypriot
administration. Fearful of a "Luxembourg trap," Talat is
likely to be much more circumspect about negotiating
confidence-building measures currently being contemplated by
the UN, such as the opening of Ledra Street or the
demilitarization of Old Nicosia. END COMMENT.
SCHLICHER