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Nikos Anastasiades, President Of Cyprus

The Cypriot Model and the Kosovo Problem

Serbia’s progress on its European path is based on fulfilment of the conditions and criteria set out in the Negotiating Framework, and Serbia recognising Kosovo’s independence is certainly not among them

Cyprus’s decision not to recognise the independence of Kosovo is based on the principles of respect for the sovereignty and territorial integrity of countries in international relations, says Cypriot President Nikos Anastasiades.

In this exclusive interview for CorD magazine, he talks about the similarities and differences between the status of Kosovo and the situation in Cyprus, which is often cited as an example of why the unresolved status issue will be an obstacle to Serbia’s European Union accession. The Cypriot President also explains why the best way to overcome the decades-long division of Cyprus is the “evolution of the Republic of Cyprus into a bi-zonal bi-communal federation”.

Talks on the unification of Cyprus are monitored with high expectations. At the beginning of this year, however, you noted that there should be no euphoria in this regard and that some statements of the UN envoy also excessively raise the expectations of citizens. How do you assess the current situation in this process?

– Since May 2015 we have been engaging in intensive negotiations to reach a comprehensive settlement to the Cyprus problem; a settlement that will reunite Cyprus and its people in a bi-zonal, bi-communal federation, which will safeguard and respect human rights and fundamental freedoms, and which will be in compliance with EU values and principles and the acquis. We have reached a common understanding of an important number of issues with Mr Akinci.

However, there are remaining differences in all negotiation chapters, and we have yet to embark on substantive discussions regarding a number of core issues. At the same time, there are also issues which have complexities associated with their implementation that would require time and careful planning, even if we reach a common understanding.

In the recent past, I have warned about creating a “climate of euphoria”, because there are so many details left that must be discussed and agreed upon. As such, it is vital we are well prepared, in order to present a clear plan to the people of Cyprus and thereby avoid reaching a solution with considerable gaps or ambiguities that would have a negative impact on its viability.

Some critics of the continuing negotiations consider that you are “sacrificing the republic in order to create a federation”. How do you view that?

We are working tirelessly to achieve a settlement based on a bi-communal, bi-zonal federation with political equality, as set out in the relevant United Nations Security Council Resolutions, the High Level Agreements of 1977 and 1979, and the Joint Declaration of February 2014, with a single international legal identity, a single sovereignty and a single citizenship;

NIKOS ANASTASIADES

a viable and functional solution in line with the European Union acquis, values and principles; a European solution that will safeguard the human rights and fundamental freedoms of all Cypriots.

All of my six predecessors were elected president of the Republic of Cyprus with a mandate to pursue a solution of the Cyprus problem on the basis of a bi-zonal federation, in line with the basis set out by late President Archbishop Makarios III, the first president of the Republic of Cyprus, in February 1977. Since then, all of the country’s political leaders have accepted that the only way to get rid of the unacceptable status quo is for the Republic of Cyprus to evolve into a bi-zonal bi-communal federation. I have to say that when we reach a solution, there will not be any gap, but a continuation of the current state under a new constitutional structure, from day one.

In order to achieve a sustainable agreement that would put an end to the division of Cyprus, it is also essential that Turkey has a constructive approach. You recently said that it is necessary for Ankara to convert its words into deeds. Do you see a potential problem in this regard?

– It is our sincere hope that Turkey, an occupying force in Cyprus, will demonstrate the genuine political will to reach a settlement, not via rhetorical assurances, but through the adoption of tangible steps that will positively underpin the negotiating process.

When we reach a solution, there will not be any gap, but a continuation of the current state under a new constitutional structure, from day one

There is much that Turkey should do in this regard. Some key issues for the resolution of the Cyprus situation depend entirely on Turkey, such as the issue of territory, the security issue and the abolition of the anachronistic system of guarantor powers.

How is Cyprus handling the migrant crisis that is facing the EU and which has hit Greece the hardest in recent weeks?

– Cyprus has committed from the very beginning to streamlining its efforts to match those of the European Union, in order to effectively address these unprecedented migratory pressures. Within this framework, Cyprus has accepted to host 541 recipients of international protection status from Greece, Italy and third countries, in the context of the relevant Relocation and Resettlement programmes. Furthermore, Cyprus has responded to the call of the Commission regarding the need for experts and has already sent asylum experts to hotspots in Greece, in order to assist with the implementation of the Relocation Programme. Furthermore, Cyprus has sent in-kind humanitarian aid to Greece via the Civil Protection Mechanism.

We reached an agreement with Turkey during the last European Council Summit, and we hope that will alleviate Greece and allow the prosecution of smugglers. We are ready to exert every effort that will contribute to the fast and effective implementation of this agreement.

When Cyprus is discussed in Serbia, talk often turns to the decades-long struggle to restore the sovereignty of its entire territory, though of course in the context of the Kosovo crisis. Does the example of Cyprus show that there are no quick solutions for solving such complex problems?

– The Kosovo crisis and the Cyprus issue are two equally critical yet different issues, with their own particularities. In the case of Cyprus, in 1974, a foreign country, Turkey, invaded and occupied 37 per cent of the territory of Cyprus, a sovereign and independent state. That occupation continues to this day. Despite the complexities that exist at the negotiation table, our efforts are directed towards achieving a clear goal: reaching a comprehensive settlement that will reunite Cyprus and its people in a bi-zonal, bi-communal federation. As I have already said, Turkey has an important role to play in efforts aimed at reaching a settlement as soon as possible.

The Government of Cyprus has so far persevered in its policy of not recognising Kosovo’s unilateral declaration of independence. Is your government determined to continue with this policy?

– Cyprus does not recognise the 2008 Unilateral Declaration of Independence by Kosovo and abides by the UNSCR 1244(1999) and the relevant International Court of Justice ruling. The decision not to recognise Kosovo’s independence is based on principles and, specifically, on our strong commitment to respecting states’ sovereignty and territorial integrity. Given our own experiences, respect for international law is a driving principle in our foreign policy and our relations with other countries. At present, we do not see any change in circumstances that would warrant a shift in our position.

Cyprus has committed from the very beginning to streamlining its efforts to match those of the European Union, in order to effectively address these unprecedented migratory pressures

What do you make of the message sent to Belgrade that “the EU will not tolerate another Cyprus”, and that if Serbia wants to achieve EU membership, it will have to recognise Kosovo’s independence?

– The progress of Serbia on its road to European is based on the fulfilment of the conditions and criteria set out in the Negotiating Framework, and the recognition of Kosovo’s independence by Serbia is certainly not among them. What the EU seeks from Serbia is to enhance cooperation and normalise relations with Pristina, within the framework of the Belgrade-Pristina dialogue, in which, we have to admit, Serbia has indeed been cooperative and constructive.

The latest revision of the credit arrangement with Cyprus saw the IMF note that the country’s macroeconomic results are satisfactory, which means that the policy of reforms and savings has yielded results. How far have you progresses in terms of overcoming the crisis which your country has found itself in since 2013?

– There were three dimensions to the Cyprus crisis: a recession, a fiscal crisis and a banking crisis. All of them have seen good progress achieved to date. The Cypriot economy is now emerging from recession. After almost four years of recession, the Cyprus economy grew by 1.6% in 2015, marking the highest growth in the last seven years.

NIKOS ANASTASIADES

With a restructured and fully recapitalised banking sector – mainly through important international investors – consolidated public finances and a programme of radical structural reforms, Cyprus has managed to return to international capital successfully.

Obviously, we have a number of challenges still to face: most importantly, to restructure a good part of the Non-Performing Loans and to address levels of unemployment that are still unacceptably high. We now have in place tools that will be used to address the high number of NPLs in the banking system: the foreclosure law, the insolvency framework, the banking ombudsman etc. Substantial progress in viable restructuring has now been achieved. Unemployment has also begun to show the first signs of reducing, as a result of the recovering economy.

Three years have passed since you had to make the decision to enforce one-time taxation on deposits in Cypriot banks which exceed 100,000 euros. That was part of the agreement with the EU, which allowed Cyprus to gain funds to overcome the crisis. To what extent has this move – which many consider as having particularly hit wealthy clients who had deposits in Cypriot banks – been reflected on the banking sector, which is very important for Cyprus’s economy?

– Significant results have been achieved and have completely transformed in the banking sector. It is now smaller and healthier, no longer reliant on high foreign deposits and operating under the direct supervision of the ECB.

The banks have been restructured and recapitalised (mainly through private capital in the form of foreign investments from the United States and Europe) and are refocusing their operations with a prudent risk-based approach to lending, while they now have adequate capital.

We are in a position now to say that confidence and stability have been restored. So, to answer your question, yes, the banking sector is definitely different now, as it is more robust and reliable.

Cyprus is among the EU member states that are questioning the justification of further sanctions against Russia. In today’s circumstances, how successful can it be to advocate for a policy of cooperation between Russia and the West? This is a topic that is currently very relevant in Serbia.

– Cyprus is in favour of a pragmatic and mutually beneficial relationship between the EU and Russia, as well as maintaining open channels of communication. In this regard, we believe the EU’s strategy towards Moscow should not be limited to imposing restrictive measures. Let us not forget that Russia is an important EU partner in the fields of the economy, trade and energy, and is also an important partner in the fight against the Islamic State and terrorism. Sanctions will not solve the problem.

The decision not to recognise Kosovo’s independence is based on principles and, specifically, on our strong commitment to respecting states’ sovereignty and territorial integrity

In this era of hunting for new sources of stable energy supplies, the role of Cyprus becomes very important. You spoke at the recent Mediterranean Forum on Gas and Oil about the importance of “transnational cooperation”. How should that look and which countries – under the conditions in which Europe and the world now find themselves – should be encompassed by this cooperation?

– Since the first discoveries of hydrocarbons in the Eastern Mediterranean, we have advocated for this natural wealth not to lead to competition and antagonism, but to cooperation and synergies among the countries of the region, in order to satisfy their energy needs, provide them with energy security, contribute to their sustainable economic development, improve bilateral relations and serve as a catalyst for broader cooperation on a regional level, with a positive reflection on peace and stability.

NIKOS ANASTASIADESThus, energy became one of the main pillars of the network of trilateral cooperation frameworks that Cyprus promoted with a number of countries in our region, i.e. Cyprus-Greece-Egypt, Cyprus- Greece-Israel, Cyprus-Greece- Jordan, Cyprus-Greece-Lebanon. This cooperation policy is neither exclusive nor directed against any country. On the contrary, it is of an inclusive nature, and our wish is to expand it to the greatest possible extent. The only condition is that the countries wanting to participate in respect to international law and the sovereign right of any country to explore and exploit their own natural resources.

I would also like to stress the importance of East Med hydrocarbons to the energy security of the European Union and the promotion and implementation of the EU’s energy policies. I would point out that in the first report of the European Commission on the Energy Union, the State of the Energy Union, there is recognition of the fact that the discoveries of natural gas in the East Med can contribute to the EU’s energy security for the first time. I believe that our policies serve both the interests of our region and those of the European Union as a whole, of which Cyprus is a Member State.

How much time will be needed to implement infrastructure projects that would connect Cyprus and Eastern Mediterranean countries to Greece and the rest of the EU? The European Commission has supported the “Euro-Asia Interconnector” project, which would permit the transfer of electricity from Israel to Greece via Cyprus, and also the “EastMed pipeline” project, which will connect Cyprus with Greece via a gas pipeline.

– The European Commission recognises the importance of the EuroAsia Interconnector Project and the East Med Pipeline Project to the implementation of the European Union’s policy of diversification of energy sources and routes, as well as their contribution to the energy security of Europe. As such, it has adopted them as Projects of Common Interest and financed their feasibility studies. These studies will examine the technical feasibility of the projects, as well as their financial viability.

I note that the EuroAsia Interconnector Project will use a submarine electric cable to connect the electricity grids of Israel, Cyprus and Greece to mainland Europe, while the purpose of the East Med Pipeline Project is to export natural gas from the Eastern Mediterranean (Cyprus, Israel) to Greece via submarine pipelines. I should also note that both projects are private, with no direct government involvement.

Serbia and Cyprus enjoy a long-standing traditional friendship, based on historical and religious ties, as well as enhanced cooperation in various fields

The EuroAsia Interconnector Project is already at an advanced stage. The project promoter last December awarded three studies that will pave the way for the pre-works phase, leading to implementation and commissioning. It is envisaged that the project will be completed in three phases, in 2017, 2019 and 2022.

The feasibility study for the East Med Pipeline Project, which was adopted as a Project of Common Interest more than a year after the EuroAsia Interconnector, is also underway. Once the study is completed and it has been proven that the project is technically feasible and financially viable, the governments involved will take the necessary decisions.

How much progress has been made on researching reserves and producing natural gas in Cyprus’s “Aphrodite fields” and are you still interested in the scenario of connecting with Egypt via gas pipeline?

– Last June, the Block 12 Consortium declared the Aphrodite Field commercial and soon after submitted a Development and Production Plan for Aphrodite. This plan is currently under discussion at the Ministry of Energy, as the Cyprus Government has to agree on the plan with the Consortium (Noble, BG, Delek).

Based on existing natural gas quantities (the latest independent resource assessment confirmed that Aphrodite contains mean gross natural gas of 4.5 tcf) and the current economic environment, the Cyprus Government and the Block 12 Consortium concluded that a regional submarine pipeline for the export of Aphrodite’s natural gas to Egypt seems to be the most commercially viable option. Suffice to say that we are currently discussing the export of natural gas with Egypt and companies that run the LNG Plants in Egypt, with a view to concluding the necessary commercial agreements. I would simply add that natural gas from Aphrodite will also be brought to Cyprus for electricity generation purposes.

Finally, relations between Serbia and Cyprus are friendly. In which areas do you see room for further improvements?

– Serbia and Cyprus enjoy a long-standing traditional friendship, based on historical and religious ties, as well as enhanced cooperation in various fields. The remarkable support and solidarity that our people have demonstrated throughout the years, the principled positions of Serbia on the Cyprus problem and the consistent position of Cyprus on the non-recognition of Kosovo’s unilateral declaration of independence, represent only some elements that demonstrate the excellent level of our bilateral relations.

Our close cooperation can also be seen through the extensive legal framework of bilateral agreements signed between the two countries. Moreover, Cyprus and Serbia opened a new chapter in relations between our countries with the staging of the first Cyprus-Serbia Intergovernmental Conference in Belgrade in January 2013, which was attended by the President of the Republic of Cyprus and five Ministers. Cyprus is looking forward to hosting the second Conference in Nicosia soon.