VZCZCXRO4866
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHNC #0529/01 1931216
ZNR UUUUU ZZH
P 111216Z JUL 08
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC PRIORITY 8964
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 1173
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 03 NICOSIA 000529 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL CY
SUBJECT: GOC PRESIDENT CHRISTOFIAS PREPARES THE GROUND FOR 
ANNOUNCEMENT OF DIRECT TALKS 
 
¶1.  (SBU) Summary:  In a July 8 press conference, President 
Christofias stated that his three meetings with Turkish Cypriot 
leader Talat have fully clarified the basis for full-fledged 
negotiations - a lingering concern for the G/C leader.  He also 
argued that the Working Groups and Technical Committees (WGs and 
TCs) have achieved progress and convergence on many important 
issues. His statements were largely interpreted as an indirect 
announcement of the commencement of full-fledged negotiations, an 
assumption, however, denied by the Government spokesman. Christofias 
outlined his strategy for success, and, no less importantly, 
explained to the largely-uninformed G/C public what they could 
expect from a federation: two states with equal status and powers 
and a federal republic co-governed by the two communities.  The 
press conference satisfied the two major parties, governing AKEL and 
opposition DISY, which fully supports Christofias's solution 
efforts.  Christofias's partners in the government, DIKO and EDEK, 
however, disagreed that the basis of the talks has been clarified 
and the WGs have made progress. Turkish Cypriot attention focused 
mainly on his analysis of the federal system; reaction was mixed but 
largely negative, with fears of T/Cs being subsumed in a 
G/C-dominated federation holding sway. End Summary. 
 
---------------------- 
CHRISTOFIAS: BASIS FOR NEGOTIATIONS HAS BEEN AGREED UPON 
---------------------- 
 
¶2.  In a July 8 press conference--ostensibly to take stock of his 
first 120 days in office but really focused on CyProb 
issues--Cypriot President Demetris Christofias confidently declared 
that his three meetings with Turkish Cypriot leader Mehmet Ali Talat 
had produced a clear basis for the direct talks: an agreement that a 
solution will be based on a bizonal, bicommunal federation, with 
political equality, single international personality, single 
sovereignty and single citizenship as explained in the leaders' 
three agreements of March 21, May 23, and July 1.  Christofias 
rejected claims that there has been no progress in the Working 
Groups and Technical Committees, stating that there in fact had been 
progress and convergence on many important points.  He expected more 
progress in the next 15 days before his July 25 meeting with Talat 
when, he said, the two leaders will make a final assessment and 
decide to start direct talks or not.  Christofias said that on July 
25 he will address the Greek Cypriots to explain his views on that 
decision. 
 
-------------------------- 
EXPLAINING HOW TO SUCCEED... 
-------------------------- 
 
¶3.  Christofias reiterated that the top priority of his presidency 
is a Cyprus settlement to reunite the country, its people and the 
economy through a bizonal, bicommunal federation.  His strategy for 
achieving this goal was cooperation with the Turkish Cypriot 
community and the revival of international interest in the Cyprus 
problem.  His meeting with Talat on March 21--and the consequent 
decision to open Ledra Street--was the starting point of this 
journey, he said.  It brought the two communities closer and sent 
the message to the international community that the two leaders 
sought reunification. 
 
¶4.  Reversing the negative international climate and enlisting the 
collective support of the UN Security Council and the EU were 
crucial for the success of the settlement efforts, according to 
Christofias.  He thought there were already good indications that 
the climate was becoming more positive, citing the recent UNSC 
resolution on Cyprus, the statement of the President of the UNSC, 
and the speech of EU Commission President Barroso before the Turkish 
Grand National Assembly, where he called on Turkey to meet its 
obligations towards Cyprus and cooperate for a Cyprus solution.  He 
said the signing of the June 5 UK-Cyprus MOU restored and deepened 
relations "with an important partner" that had turned sour last year 
after the signing of a similar MOU between the UK and Turkey. 
[Note: The UK-Cyprus MOU omitted language from the May 23 leaders' 
statement on "two equal constituent states" and caused neuralgia 
among T/Cs. End Note.] He thought it was important that the UN and 
all other interested parties accepted that a solution will be found 
by the Cypriots for the Cypriots. 
 
¶5.  Despite the optimism that generally dominated his press 
conference, Christofias was careful to point out that reaching a 
solution will be difficult and would require time and relentless 
effort.  He said setting a timeline for conclusion of the talks was 
out of the question, given the distance separating the two sides on 
certain issues.  He also ruled out arbitration, saying that it 
proved a "catastrophe" in 2004. [Note: Both sides had agreed to 
arbitration during the Annan Process. End Note] Asked how he planned 
to proceed if the two leaders were unable to announce the start of 
direct talks on July 25, Christofias clearly responded that he had 
no Plan B, but rather would just keep on trying to create the 
conditions for the start of direct negotiations. 
 
 
NICOSIA 00000529  002 OF 003 
 
 
----------------------------------- 
...AND THE BASICS OF A FEDERAL SYSTEM 
----------------------------------- 
 
¶6.  In an unusually straightforward manner, Christofias spelled out 
to the Greek Cypriot public the basics of the federal system.  "It 
is about time we digest that we will have a federation ... a 
bizonal, bicommunal federation and this means two states with equal 
status and equal powers," said Christofias.  He rejected, though, 
the understanding of the the Turkish Cypriot position that the 
federal state will be formed through the merger of the ROC and the 
"TRNC."  He said the ROC belongs to both communities and "the 
objective is to reintegrate the two communities into it, to 
co-govern the ROC, which will be turned into a federal, bizonal, 
bicommunal republic."  Christofias criticized those who pay lip 
service to a bizonal, bicommunal federation while all the while 
adopting positions that are compatible only with a unitary state. 
Christofias also defended the much-disputed term "partnership," 
language used in the May 23 leaders' agreement for which he faced 
much criticism from G/C naysayers, including in his own coalition. 
He said the two communities formed a partnership in 1960 and the 
goal now was to renew this partnership "having in mind that we, the 
Greek Cypriots, i.e., the (Greek) junta and EOKA B, bear a huge 
responsibility for the catastrophe that followed." 
 
---------------------------- 
G/C POLITICAL PARTY REACTION 
---------------------------- 
 
¶7.  Political party reaction played out along predictable lines. 
Christofias's party, AKEL, and opposition Democratic Rally (DISY) 
expressed satisfaction with the President's handling of the Cyprus 
issue and agreed with the President that the basis of the talks has 
been clarified and that the WGs and TCs had made progress.  DISY 
stated that it was looking forward to the July 25 Christofias-Talat 
meeting and hoped that the evaluation of work to date would allow 
the start of direct talks.  DISY added that the difficult issues 
could be tackled only by the two leaders.  However, AKEL's partners 
in the Government, centrist Democratic Party (DIKO) and socialist 
EDEK, did not fully agree with Christofias. Both parties thought 
that the basis for the full-fledged negotiations has yet to be 
adequately clarified, and argued that the WGs have not as yet made 
substantive progress in bridging differences.  Nevertheless, they 
both expressed support for the President's efforts and hoped that 
enough progress could be made to allow the start of negotiations. 
 
¶8.  The majority of the Greek Cypriot press interpreted 
Christofias's remarks as an indirect announcement of the start of 
direct talks.  The reports prompted Government spokesman Stephanou 
to issue a denial on July 9 and say that the final decision depends 
entirely on the July 25 assessment of the work of the WGs and TCs. 
 
------------------------------------ 
TURKISH CYPRIOTS REACT WITH DISTRUST 
------------------------------------ 
 
¶9.  Turkish Cypriot reaction to Christofias's remarks was varied but 
mostly negative.  Even though major circulation KIBRIS and 
pro-"ruling" CTP YENIDUZEN appeared satisfied with Christofias's 
statement that the federation will consist of two equal states, CTP 
General Secretary Omer Kalyoncu, a seasoned and pro-solution 
politician, told Pol LES that he was deeply worried over 
Christofias's intentions.  He said what Christofias is talking about 
is, in reality, a unitary state, a slightly-modified old ROC with 
the Turkish Cypriots returning to it.  What he described, argued 
Kalyoncu, is a federal government that will control everything, 
while the two "constituent states" will be denied the right to 
"sovereignly" exercise the powers vested in them, quoting the 
language of the Annan plan that the T/Cs want dearly. He also 
remarked that Christofias's thinking "sounds worse than 
Papadopoulos's."  Similar views were expressed by conservative 
academic Ata Atun in an article in KIBRIS.  He charged that 
Christofias really wants to alter superficially the 1960 ROC 
constitution and to have the Turkish Cypriots return under Greek 
Cypriot sovereignty but never as equal or sovereign partners. 
 
¶10.  The majority of the Turkish Cypriot papers were also annoyed by 
Christofias's statement that the key to a solution lies in Ankara. 
His statement that one of his primary goals was to end the 
occupation of Cyprus also did not go down well with the Turkish 
Cypriot press. 
 
------- 
COMMENT 
------- 
 
¶10. (SBU)Undoubtedly Christofias's optimism was meant not only to 
prepare the public for the announcement of the start of direct 
talks, but, and probably more importantly, to undercut the 
anticipated negative reaction of his partners in the government, the 
 
NICOSIA 00000529  003 OF 003 
 
 
largely anti-solution EDEK and DIKO.  Reactions to the press 
conference were a preview of likely actions in coming months G/C 
Party: support from AKEL-DISY, and lame opposition from DIKO and 
EDEK in the hope that they can continue to advocate hard-line 
positions while remaining in the government.  The most hard-line of 
the lot, though, including former President Papadopoulos and his 
closest followers, can be expected to step up the tone of their 
criticism once the direct talks are announced. We will report septel 
with a more in-depth analysis of T/C reactions. 
SCHLICHER