CYPRUS: FORMER FM PREDICTS DIFFICULT SLEDDING ON

C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000037 SIPDIS DEPARTMENT FOR EUR/SE E.O. 12958: DECL: 01/20/2019 TAGS: PGOV PREL UNFICYP CY TU SUBJECT: CYPRUS: FORMER FM PREDICTS DIFFICULT SLEDDING ON PROPERTY TALKS REF: (ORAMS CABLE) Classified By: AMBASSADOR FRANK C. URBANCIC FOR REASONS 1.4B AND 1.4D ¶1. (C) Summary: Former Republic of Cyprus Foreign Minister Erato Marcoullis on January 16 candidly told the Ambassador that the Property working group had achieved only modest success despite months of intensive discussions. Marcoullis, who headed the G/C delegation, noted the sides held fundamentally different positions at the onset of property discussions between leaders Demetris Christofias and Mehmet Ali Talat, a fact that could contribute to their failure to reach an overall settlement in 2009. She was optimistic they would make progress this year, however. On the Apostolides-Orams property case (Reftel),Marcoullis considered it less the game-changer than other Embassy contacts had, but admitted that current occupiers of between 5,000 and 6,000 Greek Cypriot properties in the north might be affected. The former FM appeared unconcerned about the upcoming "parliamentary" elections in the "TRNC," claiming that negotiations would continue despite possible leadership changes. End Summary. -------------- Convergence on Property Remains Elusive -------------- ¶2. (C) With settlement discussion on property set to commence officially on January 28, the Ambassador requested a meeting with former FM and current G/C property honcho Erato Marcoullis. Marcoullis visited the Embassy on January 16 and briefed on the state of play. She and her Turkish Cypriot counterpart unfortunately had made little substantive progress in the Working Group discussions held between March and July. Despite nearly 25 meetings, they were only able to agree that churches, mosques, and monasteries should be returned to their original owners. All other property issues remained unresolved, pointing to difficult negotiations between Talat and Christofias. -------------- G/Cs favor Original Owners' Freedom of Choice -------------- ¶3. (C) There was no communication breakdown in the meeting rooms, Marcoullis assured: G/Cs and T/Cs understood each others' stances on Property, but they were far apart on fundamentals. Greek Cypriots' positions were "based on principles and precedent, allowing all original owners -- both G/Cs and T/Cs -- to choose either restitution of their property, compensation, or exchange." She conceded that G/C land that had been used for roads or other public works obviously could not be returned. Further, Marcoullis reassured that no Turkish Cypriots would be left homeless as a result of property restitution, because G/C proposals ensured adequate time for T/Cs to relocate. G/C owners would be encouraged to proffer lease arrangements to current residents, for example. ¶4. (C) Marcoullis claimed the G/C proposals were totally consistent with the principles of bi-zonality and bi-communality, as Greek Cypriots understood them. Even if all 170,000 Greek Cypriot refugees who fled to the south after 1974 wished to return to their properties, they would still constitute a minority in the Turkish Cypriot constituent state. This scenario was highly unlikely, because most G/Cs had established themselves in other cities in Cyprus or abroad and would be reluctant to uproot themselves again, she contended. Greek Cypriot experts estimated that less than one-third of those entitled to restitution would return to their properties in the north in a post-settlement Cyprus. -------------- -------------- Turkish Cypriots Prefer a Criteria-based Approach -------------- -------------- ¶5. (C) Marcoullis claimed the T/C position on property was centered on 15 criteria that Greek Cypriot owners had to meet to be eligible for restitution. They were so restrictive, however, that only two percent of G/Cs would be able to regain their properties. Among the T/C stipulations were that only living refugees (not their heirs) were entitled to restitution, and that G/C properties which current occupants had significantly improved were excluded. Those two criteria alone would preclude restitution to the majority of Greek Cypriot property owners. -------------- -------------- Apostolides vs Orams Case Significant, Not Crucial -------------- -------------- ¶6. (C) Marcoullis downplayed the importance of the Apostolides-Orams property case currently being decided by the European Court of Justice, even though the ECJ likely would rule in the Greek Cypriot plaintiff's favor (Reftel). NICOSIA 00000037 002 OF 002 The verdict would primarily affect G/C properties in the north that were sold to EU citizens who "knowingly had purchased the property illegally," rather than the far-more-numerous properties occupied by Turkish Cypriots or mainland Turks. Marcoullis thought that, if Apostolides won, the owners of approximately 5,000-6,000 properties would likely follow with similar lawsuits. She was quick to emphasize, however, that the Greek Cypriot position on property was not founded upon this or any other court judgment, but rather upon the UN's "Pinheiro Principles," which stated that all refugees and displaced persons have the right to have restored to them any housing, land or property of which they were arbitrarily or unlawfully deprived. -------------- "There is no time limit on negotiations" -------------- ¶7. (C) When asked about the prospects for a solution should a less pro-solution "TRNC government" come to power, Marcoullis claimed that settlement negotiations historically had continued despite leadership changes on either side of the Green Line. She repeated the common G/C position that attempts to place arbitrary timelines on the process were counterproductive. "Cyprus is not Kosovo," she argued, and "we can never speak of last chances." Although she doubted the current process would lead to a solution in 2009, she believed the two sides would have "something to show" for their efforts by the end of the year. -------------- Comment -------------- ¶8. (C) Former FM Marcoullis provided useful insight into the two sides' negotiating positions on property, even though her portrayal of the chasm between the G/Cs and the T/Cs left us wondering how Christofias and Talat will be able to bridge the divide as they begin talks this week. Property is likely to be the most difficult negotiating chapter, since a quarter-million refugees and their families will be closely watching the process and protesting if they feel their rights are being prejudiced. Urbancic