Cyprus-Forum.com

by **donyork** » Sun Jan 02, 2005 1:10 pm

There will be no reunification of Cyprus—the Last Chance Saloon closed its doors in April 2004. However, expect some political gamesmanship on the issue between now and October 3 which, in the event, will work to the advantage of the north. Greek-Cypriot demands on Turkish recognition will come at a price: the lifting of embargoes on northern trade and the introduction of direct flights. The foot-dragging over these will end because the EU needs to be seen to be keeping its post-referenda promises while demanding concessions from Turkey. Indeed, expect Turkey to making that point robustly in the coming weeks. It will be a pre-condition of any trade-off which Turkey has to make prior to October 3. As part of the trade-off, the new government and president in the north will, after the elections, appear to be open to the possibility of opening dialogue with the south about amendments to the Annan Plan, but after October 3 nothing will come of this. Reunification as a practical possibility will be deferred indefinitely, or at least until the date set by the EU for Turkish membership — 15 years.

With its own economic revival under way — open trading and direct flights — the north will see that the longer reunification is delayed the better the deal, if there is ever one, will be. Foreign investment will prefer the certainties of the status quo, rather than the uncertainties of reunification. The north will also be able to offer terms not available in over-regulated Europe and therefore become a magnet for inward investment, much of it high-tec. There will be significant spillovers from investment in Turkey, the economy of which will be transformed over the next 15 years (a low-cost workforce, increasing skills, and a demographic profile which is better in the medium-term than in any other EU country). Europe needs Turkey, and the greater the challenge from the new powerhouses of India and China, the greater the need. China will not pay Europe’s pensions.

The transformation of the poor man of Europe into an economic giant cannot but have consequences for Cyprus. These will tend to act against the impetus for reunification, and not the other way around. A prosperous and increasingly self-confident north may see little point in giving up what it has — de facto independence — for a walk-on part in a united island. It may certainly agree to some readjustment of its borders, but expect no more. Readjustment and not reunification will be the issue, and the price extracted for this will be international recognition of the north as an independent state — the Republic of North Cyprus (underlining its independene by deleting‘Turkish’ in its title). It will then, simultaneously with Turkey, enter the EU in its own right —unless by then a confident and economically powerful Turkey sees that its economic position would be better outside the EU than in. A rich man does not see the world as he did when he was poor.

The rest is empty chatter.