Partition: suddenly on everyone’s lips and why solution is now a “must have” for the big powers

In the ten years since the 2004 referendum in Cyprus, writes Fiona Mullen, Director of Sapienta Economics, in an article in the Financial Mirror, she has often wondered why there has been no call from any official quarters for partition. But all of a sudden, she says, the word ‘partition’ is on everyone’s lips.

She cites recent articles in the Economist and the New York Times (see below) to this effect as well as UN envoy, Espen Barth Eide’s repeated recent warnings that he may be the last UN advisor on Cyprus.

“Perhaps more importantly, peacenik Greek Cypriots who have spent much of their lives working for a solution and being lambasted for it are now starting to say that partition is the answer,” she says, adding that “some even believe that their own government is planning for this.

She says one reason for this change of affairs is the rapidly changing world around us – the fallout between the West and Russia over Ukraine, Turkey’s apparent drift away from the NATO alliance, renewed cooperation between Israel and Egypt, the threat posed by ISIS and last, but not least, the discovery of gas in the eastern Mediterranean.

The impact of these developments on traditional alliances is already being felt, she says. Israel and Cyprus are planning to send gas by pipeline to Egypt, and on 20 November Israel suggested a long pipeline from Israel to Greece and Italy. “Such a long pipeline would essentially gobble up all of Isrrael’s spare gas and would thus push Turkey out of the regional gas picture,” she writes.

But Turkey, with the help of Russia (Cyprus’ traditional ally), has already fought back, she goes on. On 1 December, Russia pulled the plug on the South Stream gas pipeline from Russia to Bulgaria and said it will send it to Turkey instead, with Putin saying that if the pipeline does continue on to Europe, it will go through Greece.

Mullen argues that, as this part of the world is beginning to realign itself, with Russia and Turkey (and China and perhaps Iran) to the north, and Egypt and Israel )and the US and EU) to the south, guess which country is in the middle?

“If this is indeed the new world order,” she writes, “then Cyprus could go two ways.”

In the worst-case scenario, she writes, Cyprus, starting with the Exclusive Economic Zone (EEZ), becomes the place where the big powers fight it out, with damaging consequences for everyone involved. But in the best case scenario, Cyprus makes friends with all of its neighbours, including Turkey, and, like Switzerland, enjoys a lot of business in the process.

In this rapidly changing world order, she goes on, an unresolved Cyprus conflict along the new north-south fault line is suddenly a security threat to the big powers.

“So a Cyprus solution – any Cyprus solution – becomes a “must have” rather than a “nice to have” for those with big interests in the region,” she says.

“If my hunches are right, then the ‘Cypriot-owned’ solution probably has only a few months left to run,” she says. “After that, if the Cypriots can’t decide to live together, then to remove a potential battleground between north and south, the big powers will force them to live apart. And I doubt there is anything the EU will be able to do about it.”

Mullen then goes on to compare the benefits of partition to reunification, saying why she believes it would be costlier and worse for the economy in general.

A solution, she says, would cut the compensation bill by 80% as reunification would involve a mixture of territorial adjustments, exchange and reinstatement. Without it, the compensation bill would be considerably bigger than the all-island GDP.

With a velvet divorce there would be fewer incentives for Greek and Turkish Cypriots to work together to do business with Turkey and there would be fewer opportunities for foreign investors.

Partition, she says, would make it less likely that the two sides would work together to improve economies of scale, especially as both sides suffer from competitiveness problems. She cites electricity costs as an example where having two separate providers keeps costs high.

Finally, she says, there would be no “feelgood factor” boost, whereby a reunified Cyprus can market itself as the peace centre of the region.

Concluding, she says that, while all solutions carry economic risk, partition is a costly exercise with few of the spin-off effects that come from reunifying the island.

Is the Cyprus issue insoluble?

Is the Cyprus issue insoluble, asks  the New York Times in an article written by Nikos Konstandaras, a columnist for the newspaper Kathimerini, on 1 December.

In the powder keg of the Middle East’s religious and ethnic conflicts, the 40-year-long division of Cyprus between Greek Cypriots and Turkish Cypriots shouldn’t rank high on the list of dangers to defuse. This does not make the issue less relevant — nor less dangerous, the paper says.

Turkey, it says, has now raised the stakes in the eastern Mediterranean demanding that Cyprus stop exploring for gas and oil in the island’s offshore economic zone. When Ankara sent an exploratory vessel - accompanied by a warship - into the same waters, it prompted the Greek-Cypriot president to walk out of United Nations-mediated efforts to reunify the island.

Turkey is also angry that Cyprus and Greece plan to exploit the region’s energy resources in cooperation with Israel and Egypt. (Both were once close allies of Turkey but are now estranged as Ankara’s pro-Islamic rhetoric has become more strident.) As tensions rise between Greece and Turkey, the two nations’ warships have increasingly shadowed each other. Things could get worse before they improve.

Perhaps potential danger will concentrate minds, the paper says. The Greek and Turkish prime ministers are to meet in Athens this Friday and Saturday. They must ask themselves whether Turkey, Greece and Cyprus will cooperate, or focus only on their differences and risk being sucked into the region’s morass of self-justifying conflicts.

Cyprus problem: insoluble or intractable?

An article in the Economist on 29 November says that hopes of settling the Cyprus problem are starting to look unrealistic.

Bitter experience recommends scepticism about talks on Cyprus, yet two newer developments ought to spur the negotiators on. One is the economic woes that last year made Cyprus the fifth euro-zone member to need a bail-out, making the gains from a settlement appealing, another is rising optimism about offshore gas reserves in the east Mediterranean.

Yet the gas has now become just another obstacle, the paper goes on, as Mr Anastasiades says it is making a deal harder to reach. A Turkish exploration vessel, Barbaros, has intruded into Cypriot waters, ostensibly to help secure the interests of Turkish-Cypriots. In response, Mr Anastasiades has suspended the bilateral talks. Mr Eide, who calls himself a realistic optimist, says he can restart them. But Cypriot plans to exploit the gas without a pipeline to Turkey will still seem provocative. Unhelpfully, Turkey’s own EU membership talks are in the doldrums.

Many observers doubt if a federal solution would ever work. Ergun Olgen, the chief negotiator for the Turkish-Cypriot president, Dervis Eroglu, calls federations extremely tricky, especially when the components are unbalanced (Greek-Cypriots make up some 80% of the population). The system at independence in 1960 fell apart three years later. Mr Eide talks of a slippery slope of mutual recrimination, adding that, although he finds lots of agreement on the future, there is none on the present.

Is there an alternative, the paper asks? It is striking how many Cyprus-watchers are looking for one. A report by the International Crisis Group in March touted the option of two separate states within the EU, while a new book by James Ker-Lindsay, Resolving Cyprus: New Approaches to Conflict Resolution, is sceptical about a settlement, making suggestions for a far looser federation or even partition.

Mr Eide says that, although a federation is the best outcome, no solution at all is the worst, meaning that something else may have to be tried. Partition would reopen the border, return more property and land (including the ghost resort of Varosha, next to Famagusta) to the Greek-Cypriots and stop the Turkish-Cypriots’ international isolation. If the latest talks fail, its time may yet come.