VZCZCXRO2939
RR RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHNC #0067/01 0281518
ZNY CCCCC ZZH
R 281518Z JAN 08
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC 8530
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 1059
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000067 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EUR/SE 
 
E.O. 12958: DECL: 01/23/2018 
TAGS: PGOV PREL TR CY
SUBJECT: FATE OF "RULING" TURKISH CYPRIOT PARTY DEPENDS ON 
NEGOTIATIONS 
 
REF: NICOSIA 980 
 
Classified By: Classified by Ambassador Ronald Schlicher, Reasons 1.4 ( 
a) and 1.4 (d) 
 
1.(C) Summary:  The fate of the staunchly pro-reunification 
"ruling" Republican Turkish Party (CTP) increasingly depends 
on the successful resumption of Cyprus problem negotiations. 
CTP rose to power by waving a "united Cyprus" banner and 
remains northern Cyprus,s dominant political force, but 
barring a successful resumption of talks with Greek Cypriots, 
the party could revert to minority status, the situation 
prevailing in the pre-Annan Plan period.  CTP insiders worry 
that rank-and-file Turkish Cypriots are growing increasingly 
pessimistic - even disinterested -- over the possibility of 
reaching a federal Cyprus solution, long the party,s raison 
d'etre.  Further damaging CTP,s prospects are the T/C 
community's deteriorating economy and its own mediocre record 
on administration.  Perhaps sensing the risks inherent in 
tying the party,s future to the achievement of a federal 
settlement that by definition requires G/C buy-in, CTP 
leaders, including "TRNC President" Mehmet Ali Talat, have 
hinted that other solutions merit consideration, especially 
if "Greek Cypriot intransigence" dooms another major effort. 
End Summary. 
 
"NO PLAN B" 
----------- 
 
¶2.  (C) CTP insiders increasingly tell us that they have no 
alternative strategy should bi-communal talks remain mired in 
mutual distrust and recrimination after February 2008 Greek 
Cypriot presidential elections.  Cyprus problem negotiator 
Ozdil Nami told us that the party is still wedded to a 
solution along the lines of the Annan Plan (i.e., a bi-zonal, 
bi-communal federation) and enjoys Turkey,s full support. 
He added that "we do not have at yet a 'Plan B' if the 
negotiations go nowhere -- we will be in an awkward 
position."  Asim Akansoy, "President" Talat,s private 
secretary, was blunter:  "Our fate as a 'ruling party' is 
 
SIPDIS 
tied to the Cyprus Problem and solving it."  Sami Ozuslu, a 
columnist for the CTP daily "Yeni Duzen" and member of the 
party's influential central administrative committee, said a 
"Plan B" was not even being discussed in the party. 
 
¶3. (C) However, CTP interlocutors complain that the Turkish 
Cypriot community, despite voting overwhelmingly for the 
Annan Plan in 2004, has grown skeptical over the possibility 
of living side-by-side with G/Cs in a federal state.  Akansoy 
claimed that keeping the idea of a solution alive" -a demand 
of the international community" -- was growing increasingly 
difficult, and that "people are getting sick of it."  UNFICYP 
polling conducted in early 2007 supports Akansoy's fear. 
According to their numbers, 70 percent of T/Cs do not see a 
solution "in the foreseeable future," while 59 percent find a 
two-state solution "satisfactory."  Only 45 percent agree 
with "bi-zonal, bi-communal federation" as the preferred 
settlement model. 
 
"We are administrating poorly" 
------------------------------ 
 
¶4. (C) CTP's failed and or belated attempts at structural 
reform, combined with a deteriorating economy, further 
exacerbate the party,s woes.  Muharrem Faiz, a respected 
pollster, told us that for the first time in his nearly 
twenty years of polling, Turkish Cypriots' appraisal of 
successful "governance" depended more on results and services 
than on shared ideology.  If so, CTP is in trouble. 
"Presidential" spokesman Hasan Ercakica told us flat-out that 
the party "has been administrating badly" and was 
unsuccessful in "education, healthcare, etc, etc."  Necdet 
Ergun, an economic columnist and former economic adviser to 
Talat, was a bit more forgiving: "CTP tried but couldn,t do 
it all."  He claimed the "government" was delaying real 
reform until after the Cyprus Problem is solved. 
 
¶5. (C) What reforms CTP has managed to enact -- such as 
changes to social security -- have alienated much of its 
trade union base.  Pollster Faiz told us that 15 percent of 
CTP voters in 2005 were angry with the party in part because 
of its "anti-union" activities and would have a hard time 
voting for CTP again. Soyer admitted that certain party 
initiatives had hurt the base; Ercakica claimed the CTP had 
lost its trade union allies.  Neither man seemed worried 
about this development, however. 
 
NICOSIA 00000067  002 OF 002 
 
 
 
"Real Economic Problems" 
------------------------ 
 
¶6. (C) Failure to jump-start negotiations may also spell 
economic doom for an already wobbly T/C economy, much in the 
same way the enthusiastic run-up to the Annan Plan helped to 
trigger a three-year boom.  At present, CTP faces an 
officially projected negative growth of two to three percent 
in 2007 (Ref A), a contraction in the all-important building 
sector that has set off a liquidity crisis, and a bloated 
state payroll and burgeoning 2007 budget deficit rumored to 
be at least 400 million YTL (around $325 million).  Ergun 
predicts an economic "crisis" if negotiations, and the 
expectations of a "better tomorrow" that typically accompany 
them, do not begin.  "If talks don,t start, we are going to 
have real problems," he fretted. 
 
¶7. (C) A serious economic downturn would also increase an 
already alarmingly high level of Turkish Cypriot dependence 
on Ankara, since Turkey is unlikely to leave the T/Cs out in 
the cold.  "Prime Minister" Soyer complained to us that he 
needed increased financial support from Turkey because of the 
economic downturn.  T/C businessmen worried that, as payback, 
mainland Turkish business interests would win sweetheart 
deals, to the islanders, detriment.  Ergun noted that Turkey 
"could clean house" politically in the event that it had to 
bail out the T/Cs economically, a gloomy prospect for the 
"ruling" CTP. 
 
Need for a Tack Change? 
----------------------- 
 
¶8. (C) This convergence of political, administrative, and 
economic negatives has CTP leaders feeling queasy and 
vulnerable, since another failed negotiation, a la 2004, 
would prove disastrous for the party.  Cyprus Problem 
Negotiator Nami warned that "we cannot present another plan 
to our people that the Greek Cypriots might later reject with 
impunity."  Ozuslu sees the right-wing T/C parties giving CTP 
a serious political beating in response.  To insulate the 
party from such an outcome, CTP bosses talk openly of an 
"escape clause" for Turkish Cypriots should the next solution 
effort fail because of G/C intransigence.  Talat on January 
21 alluded to a threat "that would hurt Greek Cypriots if 
they don't accept a solution.  The world could stop 
recognizing them as the only government of Cyprus."  Left 
unsaid was the corollary:  some sort of upgraded status for 
the "TRNC." 
 
Comment 
------- 
 
¶9. (C) Despite its statist instincts and increasingly 
nationalist rhetoric, CTP is still the international 
community's best T/C partner in working toward a federal 
Cyprus solution.  It is the sole party in the north that both 
truly believes in a reunited island and has a "TRNC-wide," 
well-functioning organization to help deliver it.  While 
pessimism and a two-state fallback plan may be permeating 
party halls, CTP remains supportive of a bi-zonal bi-communal 
federal Cyprus along the lines of the 2004 Annan Plan.  To 
illustrate, not a single "TRNC" flag was displayed at the 
party's December 2007 birthday bash attended by "Prime 
Minister" Soyer and "President Talat."  Rather, massive 
posters touted "SOLUTION, EQUALITY, FEDERATION," and close by 
hung an undivided map of Cyprus.  But absent the start of 
real negotiations and barring an economic turn-around (the 
latter highly unlikely), CTP will, as party insiders 
forecast, be hard-pressed to stay in command after 2010 
"parliamentary" elections, with a fractious coalition 
preferring partition to reunification waiting in the wings. 
SCHLICHER