VZCZCXRO3688
RR RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHNC #0045/01 0231424
ZNY CCCCC ZZH
R 231424Z JAN 09 ZFF4
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC 9523
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBS/USEU BRUSSELS
RUCNDT/USMISSION USUN NEW YORK 1319
RUEAIIA/CIA WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000045 
 
SIPDIS 
 
DEPT FOR EUR/SE 
 
E.O. 12958: DECL: 01/22/2019 
TAGS: PGOV PREL TR CY
SUBJECT: CYPRUS: T/C "PM" PRAISES ERDOGAN, BASHES TURKISH 
MFA 
 
REF: A. NICOSIA 0017 
     ¶B. 08 NICOSIA 558 
     ¶C. 08 NICOSIA 650 
     ¶D. 08 NICOSIA 929 
     ¶E. 08 NICOSIA 981 
 
Classified By: AMBASSADOR FRANK C. URBANCIC FOR REASONS 1.4 (b), (d) 
 
¶1. (C) Summary: "I can solve problems with Turkish Prime 
Minister Erdogan," "governing" Republican Turkish Party (CTP) 
leader and "TRNC PM" Ferdi Sabit Soyer told the Ambassador 
during a January 20 meeting.  Soyer voiced strong confidence 
in the Turkish PM's pro-solution stance and full support for 
Turkish Cypriot leader Mehmet Ali Talat.  He complained, 
however, that his "government" had not obtained the requisite 
budget support from Ankara -- purportedly because of 
misinformation by the Turkish Embassy here -- and still faced 
a cash shortfall in the run-up to April "parliamentary" 
elections.  Soyer dubbed the UN-brokered negotiations 
difficult, but said the Turkish Cypriots were ready to grant 
the federal government more competencies provided the T/Cs 
had a greater voice in it.  On domestic issues, Soyer said 
that the main opposition National Unity Party (UBP) would 
suffer at the polls thanks to its hawkish leadership, but CTP 
nevertheless faced a tough slog.  The CTP leader promised 
that the "law" on casinos, vital in improving the north's 
standing with Financial Action Task Force (FATF), would pass 
by the end of the month.  Last, he noted that oversight for 
the renovation of the Apostolos Andreas Monastery in the 
Karpass region had been transferred from Talat's office to 
the Evkaf Foundation.  End Summary. 
 
Erdogan: Continued Support for Talat 
 
¶2. (C) In a January 20 meeting with the Ambassador, 
Republican Turkish Party (CTP) leader and "TRNC8 PM Ferdi 
Sabit Soyer said that Turkish PM Erdogan T/C leader had 
voiced full support for the negotiating efforts of Turkish 
Cypriot leader Mehmet Ali Talat during the January 16 meeting 
between the two in Ankara.  Soyer also said that the AKP 
government was "hopeful" regarding the UN-brokered talks. 
Furthermore, Erdogan and AKP are planning, according to 
Soyer, to revitalize Turkey's EU accession bid after March 
municipal elections (presumably in the event of an AKP 
victory) to ease a settlement on the island.  The Ambassador 
replied that DAS Matt Bryza had received a similarly positive 
message during his recent trip to Ankara. 
 
Turkish Embassy: No Friend of CTP &Government8 
 
¶3. (C) Soyer was less pleased, however, with the Turkish 
Embassy in Nicosia.  He hinted that it fed disinformation to 
the AKP government regarding the perilous state of T/C 
"public" finances in order to block extraordinary Turkish 
budget support to his CTP-led "government," which in December 
was forced to call early elections for April 2009 in the wake 
of a serious economic slowdown and concomitant budget crunch. 
 Without directly naming the Turkish Embassy, he confided to 
the Ambassador that the "classified reports they send" -- 
which he claimed to have seen while in Ankara -- are "lies." 
 
¶4. (C) Erdogan, Soyer added, had voiced "surprise" to Talat 
about the extent of the economic and budgetary crisis in the 
north, but assured him that Ankara was not trying "destroy 
CTP" in response to Talat's direct question.  That said, 
Soyer complained that his "government" still faced a TL 50 
million (approximately USD 30 million) shortfall as April 
elections approached.  Turkey in December had only 
transferred 50 million of TL 80 million due under a bilateral 
aid protocol, thus causing the "government" to delay payment 
of "public sector" wages until January.  He claimed that 
staff were "working on the problem with Erdogan," without 
going into details. (Note: Other CTP contacts report that, 
while Ankara has agreed to provide funds for "public sector" 
salaries up through the election, it still has not agreed to 
financial support for citrus growers or the moribund tourism 
sector. End note). 
 
Negotiations: T/Cs will trade stronger Federal government for 
a greater role in it 
 
¶5. (C) In a refrain heard earlier from T/C leader Talat, 
Soyer said that the Turkish Cypriots would consider a 
stronger role for the federal government at the expense of 
the constituent states provided that they had a greater role 
in it, ideally a four-to-three ratio of Greek to Turkish 
Cypriots in high-level structures.  Such an arrangement, he 
 
NICOSIA 00000045  002 OF 002 
 
 
argued, would diminish a widespread T/C fear that the federal 
government will be dominated by G/Cs, as well as debunk a 
deeply held G/C belief that the constituent states only 
benefit Turkish Cypriots and are inherently separatist. 
(Note: An UNFICYP member involved in the talks told us on 
January 22 that he had not heard of such a ratio or offer 
from the Turkish Cypriots. End Note). Soyer, while admitting 
difficulties in the negotiations, said that the "atmosphere" 
was still good. 
 
Early Elections:  Main opposition weakening, but no cakewalk 
for CTP 
 
¶6. (C) Soyer told the Ambassador that the main opposition, 
right-wing National Unity Party (UBP), was "weakening" after 
the November 2008 return as party leader of long-time UBP 
boss and former "TRNC PM" Dervis Eroglu.  In response the 
Ambassador's query regarding the effect of a UBP victory on 
the settlement process, Soyer said that the hard-line Eroglu 
wanted to conduct talks on the unrealistic basis of 
"state-to-state" negotiations, a position clearly at odds 
with the AKP government's acceptance of the present 
UN-parameters.  Soyer alleged that Eroglu had vowed in his 
recent campaigning to close the crossing points if elected. 
Nevertheless, despite all of Eroglu's negatives, Soyer 
admitted that CTP would have to work hard to come out on top 
in the early elections. 
 
Casino Law: To be passed by end of January 
 
¶7. (C) Soyer assured the Ambassador that "parliament" would 
pass a law regulating casinos by the end of the month.  The 
Ambassador reminded him that passage could help remove north 
Cyprus from a FATF money-laundering watch list, as well as 
reassure governments that had worked with the Turkish 
Cypriots on anti-money laundering efforts, such as the UK and 
the US, of T/Cs' seriousness.  In an unrelated matter, Soyer 
said that oversight for the planned renovation of the 
Apostolos Andreas Monastery in Karpass -- which has not 
commenced for reasons unclear to the Embassy despite the 
purported buy-in of both sides to a restoration plan -- has 
been transferred from Mr. Talat's office to the parastatal 
Evkaf Foundation. (Note: The largest landowner in the north 
and second largest in the south, Evkaf is a "parastatal" T/C 
entity that regulates property, including many religious and 
historical sites, in the public interest. End Note) 
 
¶8. (C) Comment:  Soyer covered little new ground in the 
meeting.  He echoed what many progressive T/Cs claim -- that 
on the Cyprus question, the "good," pro-solution PM Erdogan 
continues to grapple with the "hard-line" Turkish Foreign 
Ministry and state apparatus.  On Ankara's desires for urgent 
"public sector" reform in north Cyprus, however, little 
daylight shines between the positions of the two Turkish 
camps. 
Urbancic