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DE RUEHNC #0136/01 0321527
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P 011527Z FEB 06
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC PRIORITY 5481
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 NICOSIA 000136 
 
SIPDIS 
 
SIPDIS 
 
FOR DAS MATT BRYZA FROM AMBASSADOR SCHLICHER 
 
E.O. 12958: DECL: 02/01/2016 
TAGS: PGOV PREL TU CY
SUBJECT: MANAGING THE CYPRUS PROBLEM IN BRUSSELS 
 
Classified By: Ambassador R. Schlicher, reasons 1.4 (b) and (d). 
 
¶1. (C) Matt: In advance of your upcoming visit to Brussels, 
we would like to share some thoughts regarding recent 
developments on Cyprus, and in particular the Greek Cypriot 
strategy vis-a-vis Turkey and the EU. The Europeans need to 
hear a sobering message about the potential consequences of a 
supine acceptance of Papapdopoulos's hard-line tactics and 
the importance of coming through with more concrete 
assistance for the Turkish Cypriot community.  We should 
encourage the EU to help, not hinder, the settlement process 
by staying away from political issues better negotiated under 
UN auspices; the EU message should be to encourage the 
parties -- as well as the UN -- to get back to the 
negotiating table as soon as possible.  If the Greek Cypriots 
continue to hobble European efforts to ease Turkish Cypriot 
isolation -- or manage to ensnare the EU in the politics of 
Cyprus problem -- prospects for both a Cyprus settlement and 
Turkish EU membership will suffer. 
 
THE EU: PLAYING PAPADOP'S GAME 
------------------------------ 
 
¶2. (C) President Papadopoulos continues to pursue his 
strategy of using Turkey's EU accession process as a stick 
with which to beat Cyprus-related concessions out of the GOT; 
he wants to confront Turkey with hard choices in hopes of 
avoiding his own.  This approach does nothing to advance the 
cause of Greek Cypriot and Turkish Cypriot reconciliation, 
and Papadopoulos has further eroded prospects for reviving 
serious settlement efforts by aggressively defending ROC 
prerogatives and blocking even modest efforts by the EU to 
reach out to the Turkish Cypriots.  The EU's GOC-inspired 
failure to fulfill its commitment to easing Turkish Cypriot 
isolation ups the ante for Turkey and increases the 
likelihood of a major clash between Ankara and Brussels over 
such issues as implementation of the Customs Union Protocol. 
In Papadopoulos's universe, this would be a positive 
development.  For a range of reasons the Europeans, 
especially the Commission, have too often played the role of 
enabler to Papadopoulos's hard-line strategy, leaving the 
settlement-minded Turkish Cypriot leadership in the lurch. 
 
¶3. (C) The GOC has killed the EU's proposed direct trade 
measures for the Turkish Cypriots -- which to the GOC 
represented a dangerous step toward "upgrading" the "illegal 
TRNC."  Beginning in 2004, the GOC mounted a successful 
campaign first to convince the Commission and other member 
states (especially the Dutch and Luxembourg presidencies) to 
decouple trade and aid -- and then to use the threat of veto 
to make sure trade never surfaced on the Council's agenda. 
The GOC has permitted the Turkish Cypriots to sell some goods 
to the south (and in theory to the rest of the EU via 
ROC-controlled ports) by agreeing to the EU's Green Line 
regulation.  But trade has been very modest so far, with 
practically no Turkish Cypriot goods making their way to 
other EU markets through the south.  It is unlikely that 
trade across the Green Line will provide an economic boost to 
the Turkish Cypriots sufficient to close the gap between the 
two sides. 
 
¶4. (C) Emboldened by EU acquiescence to trade/aid decoupling, 
the Greek Cypriots then thwarted the Europeans' planned 
assistance program in December 2005 by insisting the 
Commission issue a declaration regarding Varosha and a freeze 
on property development in the north as a condition for GOC 
approval of aid.  The Turkish Cypriots resisted this, 
however, on the grounds that Varosha and property were 
settlement-related issues best handled by UN-brokered 
negotiations.  When aid was not passed by the end of the year 
(resulting a loss of 120 million out of the original 259 
million euro package) Commission staff sheepishly suggested 
to us that the UK Presidency was to blame for the aid 
stalemate, since the British did not press Talat hard enough 
to accept this deal. 
 
¶5. (C) Our assessment is different.  Empire-building 
Commission staff appeared to be in such a rush to get their 
assistance program up and running, that they were ready to 
accept Greek Cypriot conditions that actually set back 
overall prospects for a settlement.  By accepting the GOC's 
demand for a declaration, the Commission maneuvered the 
Turkish Cypriots into catching the blame for scuttling the 
aid program -- damaging their own credibility as a 
non-partisan player, embarrassing Talat, rewarding Greek 
Cypriot hardball tactics, and thereby worsening the general 
atmosphere between the two sides. 
 
SEEKING A CHANGE OF VENUE: UN TO EU 
----------------------------------- 
 
 
NICOSIA 00000136  002 OF 003 
 
 
¶6. (C) December's aid trainwreck is part of a larger Greek 
Cypriot strategy to move discussion of settlement-related 
issues from the UN to the EU.  Indeed, after immediately 
rejecting Turkey's January 2006 "Action Plan" (which sought 
to link the implementation of Turkey's EU obligations to the 
EU's commitments to the Turkish Cypriots), the GOC spokesman 
reiterated the long-standing Greek Cypriot demand for the 
hand-over of Varosha.  From the Greek Cypriot perspective, 
this approach makes a great deal of sense. 
 
¶7. (C) Papadopoulos and his team of advisors (made up 
overwhelmingly of lawyers) view Turkey's EU accession as a 
legalistic, contractual process in which there is no room for 
bargaining.  The Cyprus problem, however, is an amalgam of 
fundamentally political questions -- which the UN has 
historically, and correctly, sought to resolve through a 
process of bicommunal give-and-take.  By tying settlement 
questions to Turkish EU accession (where he theoretically has 
a veto), Papadopoulos seeks to capitalize on Turkey's 
European ambitions in order -- by putting Turkey's own hard 
choices up front -- to circumvent political negotiations in 
which Greek Cypriots might have to make tough compromises. 
Although Papadopoulos steadfastly maintains that he wants the 
UN process to resume, it is no accident that he has littered 
the way with obstacles -- by playing coy about Greek Cypriot 
negotiating goals, refusing to meet Talat (and trying to 
frighten others from doing so as well), and insisting on 
vague steps to "prepare the ground" before any talks can take 
place. 
 
OUR MESSAGE TO THE EU: WAKE UP AND SMELL THE COFFEE 
--------------------------------------------- ------ 
 
¶8. (C) These developments have ominous implications both for 
settlement prospects and for candidate Turkey's willingness 
to play ball with the EU.  On the settlement front, the 
once-bitten-twice-shy Turkish Cypriots will not trust the EU 
as an honest broker as long as it is hobbled by a 
veto-wielding Papadopoulos.  Greater EU involvement in 
settlement-related questions not only undermines the UN, but 
also drives the Turkish Cypriots further from the negotiating 
table.  The European Union can play a valuable role in 
support of UN efforts (offering to fund the opening of Ledra 
Street, for example, once a UN-brokered deal is reached), but 
we should encourage them (especially the Commission) to keep 
their nose out of issues like Varosha that belong squarely on 
the UN's agenda.  To us, this is a separate question from 
whether Talat and/or the GOT should signal willingness to 
deal with the GOC on Varosha under UN auspices. 
 
¶9. (C) At the same time, the Europeans should look for 
concrete ways to help keep the Turkish Cypriots on board the 
pro-European, pro-settlement bandwagon.  Talat's long-term 
political survival is dependent on his ability to deliver on 
voters' expectations of an end to "isolation" and eventual 
reunification of the island.  For the moment, the EU has 
given Talat very little to show for his pro-settlement 
policies and rhetoric -- even though Europe's proximity and 
economic power mean that the Turkish Cypriots have nowhere 
else to turn if they are to find a viable alternative to 
greater dependence on Turkey.  If the Commission cannot find 
creative ways around Greek Cypriot obstructionism, then 
perhaps right-thinking member states can -- for example by 
offering bilateral development assistance to the Turkish 
Cypriot community, as the UK is already doing.  If the 
Europeans fail to take concrete steps, nationalist 
politicians currently waiting in the wings may reassert 
themselves, resulting in a Turkish Cypriot leadership far 
less enthusiastic about reunification with the south. 
 
¶10. (C) The corollary to helping the Turkish Cypriots is for 
the Europeans to make it clear to Papadopoulos that the EU 
has neither the ability nor the intention of helping him out 
of the Cyprus problem via hints of an EU-led political 
process.  The time has come for Papadopoulos to stop stalling 
and sit down with Talat to negotiate seriously.  The EU 
cannot facilitate this dialogue, but member states and the 
Commission should certainly be prodding Papadopoulos to 
reengage in meaningful UN-brokered talks. 
 
¶11. (C) Meanwhile, the international players should be 
looking for initiatives which will actually cost Papadopoulos 
in domestic political terms should he say "no."  Turkey's 
recent "Action Plan" was easy for Papadopoulos to reject; 
indeed most Greek Cypriots sneer at the proposal.  That said, 
Gul's initiative did have the benefit of putting some 
domestic pressure on Papadopoulos to put forward some ideas 
of his own.  In this sense, there is the possibility of 
forging future initiatives which Papadopoulos may need to 
take seriously. 
 
 
NICOSIA 00000136  003.2 OF 003 
 
 
¶12. (C) It is worth stressing to the Europeans that the 
current stalemate on the Cyprus problem cannot be ignored, 
and will continue to cause repeated and regular crises in 
EU-Turkey relations until some kind of meaningful UN 
settlement process gets underway.  We leave it to our 
colleagues in Embassy Ankara to assess likelihood of Turkey 
freezing its accession process as a result of Greek Cypriot 
intransigence over Cyprus and/or EU failure to deliver for 
the Turkish Cypriots.  From our perspective, however, it is 
clear the Greek Cypriots underestimate this possibility; 
Papadopoulos is cocksure that he has the GOT against the 
ropes because Turkey's interest in the EU will not flag.  The 
Europeans should be helping us convince him that this is not 
a sure thing. 
SCHLICHER