VZCZCXRO5556
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHNC #0199/01 0791422
ZNY CCCCC ZZH
R 201422Z MAR 09
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC 9726
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 1395
RUEHBS/USEU BRUSSELS
RUEAIIA/CIA WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 NICOSIA 000199 
 
SIPDIS 
 
DEPT FOR EUR/SE 
 
E.O. 12958: DECL: 03/20/2019 
TAGS: PGOV PREL TR CY
SUBJECT: CYPRUS: TURKISH CYPRIOT MAIN OPPOSITION UBP 
CONFIDENT OF VICTORY 
 
REF: CABLE--NICOSIA 186 
 
Classified By: Ambassador Frank C. Urbancic for reasons 1.4 (b) and 1.4 
 (d) 
 
1.(C) Summary:  The main opposition National Unity Party 
(UBP) is confident of victory in April 19 Turkish Cypriot 
"parliamentary" elections thanks to widespread discontent 
with the economy and public skepticism over prospects for a 
Cyprus solution, the latter long the "governing" Republican 
Turkish Party,s (CTP) raison d'etre.  Both factors, 
according to UBP insiders, will handily negate attempts by 
CTP to scare voters over UBP,s hard-line CyProb past. 
Moreover, party leaders now claim to support Turkish Cypriot 
leader Mehmet Ali Talat,s negotiating efforts, despite their 
"TRNC forever" diatribes and continued calls for 
"state-to-state" talks.  On the economy, UBP offers few 
concrete proposals to shrink the bloated state sector, the 
greatest brake on growth prospects.  Further, dissident 
voices within UBP claim that leader Dervish Eroglu,s 
sky-high negative polling will limit the party,s upward 
potential.  Even in the event of a UBP victory, they expect 
little real economic reform from old-guard leader Eroglu. 
End Summary. 
 
 
"People are focused on the economy" 
----------------------------------- 
 
¶2. (C) Eroglu, the septuagenarian UBP leader, told Embassy 
officers on March 13 that the party would easily protect a 
15-point lead over "governing" CTP (according to a March 3 
poll excerpted in Reftel).  UBP might even add 4-5 points to 
its commanding 43.3 percent polling, versus 28.4 percent for 
second-place CTP in the April 19 "TRNC parliamentary" 
elections.  People were focused on the economy, Eroglu said, 
and really did not care about the Cyprus problem.  To make up 
ground, CTP would try to stir up past demons, for example 
UBP's 2002 refusal even to accept the Annan Plan as the basis 
for Cyprus negotiations.  UBP, he argued, had already been 
punished by voters when it was banished to the "opposition" 
benches in 2003; now it was CTP's turn to answer for its 
dismal record.  Eroglu would consider forming a "government" 
with any party, including with its ideological nemesis CTP 
)- a "grand coalition" never seen in 30 years of "TRNC" 
elections. (Note: We have heard increasingly from a number of 
sources that the Turkish MFA would like a CTP-UBP coalition 
in order to push through desperately needed but painful 
public sector reforms.) 
 
¶3. (C) Other UBP stalwarts, while agreeing with Ergolu that 
the party would finish first, appear less triumphant. 
Huseyin Ozgurgun, the former UBP leader and a current "MP," 
told us in early February that CTP had "screwed up running 
things" despite controlling "parliament," the "presidency," 
and all major "state" institutions.  Nevertheless, he thought 
his party would not break 40 percent of the vote, given 
lingering anti-UBP sentiment amongst many Turkish Cypriots. 
Osman Ertug, a former "TRNC" rep in Washington and UBP 
candidate, told us on March 11 that the party could only hurt 
itself in the run-up to elections, through internecine 
quarrels, for example.  Ertug thought that CTP, given its own 
poor record and hapless administration, would be hard-pressed 
to criticize UBP's past mismanagement, however.  Muharrem 
Faiz, an independent pollster who conducted the March 3 
survey, had little doubt UBP would triumph, provided the 
party acted cautiously. "The more they keep quiet, the more 
votes they will get", Faiz joked. 
 
"We,ll support Talat" 
--------------------- 
 
¶4. (C) UBP and Eroglu have adopted a position on the CYPROB 
and the on-going UN-brokered process that is tactically deft, 
if intellectually dishonest:  they pledge support for Talat 
without abandoning their confederal, "TRNC forever" ideology. 
 Eroglu told us that he had no intention of interfering with 
Talat despite the party,s recent "Cyprus Resolution" that 
calls for "state-to-state" negotiations and smacks of 
separatism.  Moreover, Eroglu claims he agrees with Talat on 
many issues, such as limited (but strictly controlled) 
property restitution to Greek Cypriots and the need for a 
"virgin birth" of the new partnership state (Note:  Talat 
does not insist on the last two points, at lease in most 
recent discussions.)  All he wanted in the event of a UBP 
victory was more regular and thorough briefings on the 
settlement process from Talat.  "TRNC" loyalist Ertug echoed 
 
NICOSIA 00000199  002 OF 003 
 
 
this line, telling us that UBP would support Talat as long as 
he kept them abreast of events and did not agree to "single 
sovereignty" (which Talat already has blessed, at least in 
principle, in the July 1 leaders's statement.) 
 
¶5. (C) Eroglu and UBP most likely will toe whatever line AKP 
supports, which at present is pro-Talat and supportive of the 
UN-brokered peace process.  The new Turkish "ambassador" to 
the "TRNC", Sakir Fakili, told the Ambassador on March 12 
that Turkey, regardless of who won on April 19, fully 
supported Talat.  Ergun Olgun, former "TRNC President" Rauf 
Denktash's "Undersecretary" and one of the key Annan Plan 
negotiators, told us on March 13 that he was urging UBP to 
support Talat, although the party would still push for 
"shared sovereignty" vice single.  Hasan Ercakica, Talat's 
press spokesman, said that Eroglu regretted his knee-jerk 
2002 rejection of the Annan Plan, which had burned bridges 
with AKP that are only now being repaired.  Ercakica added, 
however, that he doubted the UBP leader would make the same 
mistake twice. 
 
 
 
 
"Can,t do that--need to get elected." 
------------------------------------ 
 
¶6. (SBU) Although UBP is running its campaign on the 
economy's woes and CTP's poor governance, the party's 
economic program skirts the issue of shrinking the bloated 
public sector, the north,s primary economic ailment. 
Rather, it touts four theoretically promising but highly 
unrealistic programs:  turning the "TRNC" into a free trade 
zone, bringing water, gas, and electricity from Turkey to 
reduce costs and meet looming shortages, attracting and 
implementing technology-based service sector projects, and 
becoming an outsourcing center for companies outside Cyprus. 
(Note:  These proposals are either unrealistic given the 
north's high labor costs or would require massive external 
financing.) 
 
¶7. (C) More candid voices claim that UBP is either unwilling 
or unable to tackle painful economic issues plaguing the 
north.  Ertug sheepishly told us that a UBP government would 
not lay people off, even though the party regularly hammers 
CTP for allegedly padding the state payroll with 6,700 new 
hires.  Metin Yalcin, chair of the T/C Businessmen,s 
Association (ISAD), said that UBP had talked to him about 
forging a "mixed economy," which he rejected as a "disaster." 
 Even the secret, post-election "bitter economic pill" Eroglu 
shared with us recently was at best nibbling at the edges: 
stopping overtime, reducing foreign trips for "government" 
employees, and "voluntarily" moving "public sector" workers 
to the private sector.  Eroglu even told an aide during the 
Ambassador,s courtesy call that he could not consider more 
dynamic labor rules, since "he needed to get elected". 
 
"Eroglu can only dish out Turkish aid" 
------------------------------------- 
 
¶8. (C) Eroglu's harshest critic, at least privately, is 
former UBP chief Tahsin Ertugruloglu, ousted by Eroglu in a 
bitter November 2008 fight.  Ertugruloglu claims that Eroglu 
is "too easy a target" for CTP, given the latter man's 
undistinguished past as both "PM" and UBP leader.  He expects 
UBP to win at most 35 percent of the vote, turning the 
election into a horse race.  Ertugruloglu claimed his 
greatest fear is Eroglu's inability to conduct crucial 
economic reforms.  Eroglu only knows how to distribute 
Turkish aid money and cannot "fix" anything, he explained. 
Ertugruloglu also believes that UBP still has not managed to 
repair its relationship with AKP.  Last, were the party to 
manage somehow to form a "government" after April 19, he 
predicted an economy-triggered UBP meltdown so strong that 
the party would be forced to call another round of elections 
in 2010 or 2011. 
 
¶9. (C) Comment:  While UBP enjoys a healthy lead in the polls 
fueled by raw anger at CTP, elections are still a month off, 
with the official campaign begining on March 24.  Should 
UBP's lead endure and the party succeed in forming a new 
"government," we expect little structural economic reform 
unless Turkey forces the issue, and even then it will be a 
tough fight.  Regarding support for Talat and the on-going 
Cyprus settlement process, Eroglu and UBP -- despite their 
darker instincts -- will probably take their lead from the 
AKP government, which for now supports the broad outlines of 
 
NICOSIA 00000199  003 OF 003 
 
 
Talat's solution efforts.  To compensate, however, the 
UBP-led "government" will probably try to pick fights with 
pro-solution forces on the margins, exemplified by the 
party's recent threat to rewrite school textbooks that CTP 
earlier had stripped (in line with Council of Europe 
guidelines) of nationalistic and anti-Greek Cypriot language. 
Urbancic