The leaders of the Greek and Turkish territories on the disputed Mediterranean island of Cyprus met yesterday for the first time in almost two years, in a bid to find a solution to the island's decades-long conflict.
In a disused airport inside the United Nations-controlled buffer zone in Nicosia, the head of the Cypriot government Nicos Anastasiades, and the Turkish Cypriot leader Dervis Eroglu, held their first formal meeting since mid- 2012, under the watch of the UN.
"The leaders expressed their determination to resume structured negotiations in a results-oriented manner," UN envoy Lisa Buttenheim said.
In a joint declaration, both sides committed to exploring the possibility of a federation on the island, comprising two zones.
The renewal of talks sparked hope that a solution to the decades-long conflict could be reached, as the island approaches the 40th anniversary of the Turkish invasion in 1974.
Both regions are economically fragile. Cyprus entered an EU-IMF bailout programme last year following the collapse of its banking sector, a factor which many believe could bolster support for an agreement.
Similarly, the discovery of gas reserves to the east of the island may also provide an economic stimulus to resolve the impasse. Israel is keen to co-operate with Turkey on energy policy, but is pushing for resolution of the Cyprus issue, with the US engaged in behind-the-scenes diplomacy over the last few months.
Nonetheless any decision would be subject to a referendum. The last referendum, on the eve of Cyprus’s accession to the EU in 2004, saw voters reject the so-called “Annan plan” for reunification.
Joint declaration
Yesterday, the European Commission welcomed the joint declaration, expressing its hope for the swift resolution of "a fair and viable comprehensive settlement of the long-standing Cyprus problem".
The situation in Cyprus is politically sensitive for the European Union, which admitted the Republic of Cyprus to the bloc in 2004 but does not officially recognise the Turkish-held northern territory.
Turkey’s claim over the northern part of Cyprus has also become a barrier to that country’s bid for EU membership. Of the 35 “chapters” that have to be negotiated for Turkey to join the EU, 14 have been effectively blocked due to issues regarding Cyprus.
Separately, the European Commission yesterday published the latest review of the Cypriot bailout programme. Cyprus became the fourth euro zone country to accept a full bailout from the IMF-EU programme last March as its banks tottered on the brink of collapse, due in part to exposure to Greek debt.
While the troika said the programme remained “on track”, with Cyprus meeting its fiscal targets for 2013, it warned that unemployment and high levels of non-performing loans remain a high risk for the country.
The Cypriot finance ministers said capital controls, in place since the bailout 11 months ago, would be further eased next week.
