VZCZCXRO6716
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHNC #0200/01 0791425
ZNR UUUUU ZZH
R 201425Z MAR 09 ZDS
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC 9729
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 1398
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 NICOSIA 000200 
 
C O R R E C T E D  C O P Y (ADDED SIGNATURE) 
 
SENSITIVE, SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL CY
SUBJECT: CYPRUS:  DIKO BATTLE COULD AFFECT COALITION, TALKS 
 
NICOSIA 00000200  001.2 OF 002 
 
 
¶1.  (SBU) SUMMARY:  Democratic Party (DIKO) leader Marios Karoyian 
suffered a major defeat in March 15 internal party elections that 
puts his political future in doubt, threatens the fragile coalition 
with President Demetris Christofias's AKEL party, and conceivably 
could hinder Cyprus settlement talks.  Though Karoyian won 
re-election unopposed, party forces advocating a harder-line Cyprus 
problem policy -- and distance from Christofias -- won a controlling 
majority in the decision-making organs of the party.  Immediately 
upon taking power, they reiterated their disagreements with the 
President and called for a reassessment of DIKO's cooperation with 
the government.  Sensing a possible crack in the coalition, 
opposition Democratic Rally (DISY) made alliance overtures to 
centrist DIKO, an electoral nightmare scenario for Christofias.  In 
response, the President may give greater weight to DIKO's hard-line 
CyProb views in order to maintain coalition health.  END SUMMARY. 
 
-------------------------------- 
DIKO Leader Suffers Major Defeat 
-------------------------------- 
 
¶2.  (SBU) DIKO's division into pro-Karoyian and pro-former President 
Tassos Papadopoulos factions has never been more evident than in the 
party's electoral congress of March 15.  Though both factions 
espouse uncompromising views on the Cyprus problem, the former 
supports a more tolerant stance towards President Christofias for 
the sake of staying in power, while the latter advocates a more 
demanding and critical approach and occasionally threatens to 
withdraw from government.  Karoyian himself was elected unopposed, 
but the remaining three top leadership positions and the majority of 
the seats in the powerful Executive Office went to candidates 
representing the rival camp.  George Colocassides was re-elected 
DIKO Deputy Leader, Nicolas Papadopoulos (the late President's son) 
was elected Vice President, and Papadopoulos's godson, Kyriacos 
Kenevezos, was re-elected General Secretary.  Nine out of 20 members 
of the Executive Office are hardcore Papadopoulos acolytes, six side 
with Karoyian, and the remaining five are considered neutral.  In 
the elections for new Central Committee members, Papadopoulos's 
daughter, Anastassia, in her first bid for a party post, won the 
highest number of votes from among all candidates. 
 
¶3.  (SBU) Opinion leaders viewed the results as a major defeat for 
Karoyian and a message that the DIKO rank-and-file favors a 
harder-line approach towards the Christofias administration. 
However, Karoyian's conciliatory stance towards Christofias is but 
one reason for the embarrassing defeat.  Image-wise, the 
pro-Karoyian candidates were considered less savvy politicians and 
relatively inexperienced, for example.  Further, the loss indicated 
that the party leader, in his two-and-a-half years in power, had 
failed to control fully the party machinery.  Former DIKO Deputy 
Leader Nicos Cleanthous told EmbOff on March 18 that in 2006, Tassos 
Papadopoulos "had allowed" the election of Karoyian but intended him 
only to play a transitional role while son Nicolas gained necessary 
DIKO experience. 
 
----------------------------- 
Winners criticize Christofias 
----------------------------- 
 
¶4.  (SBU) Hours after the election, predictions that the 
pro-Papadopoulos camp would press for a reassessment of the 
relationship with Christofias were confirmed.  Deputy Leader 
Colocassides on March 17 announced that DIKO's cooperation with the 
President should be reexamined, since there were serious 
disagreements on the Cyprus issue but also on other crucial issues 
such as education reform, defense, the economy, and Cyprus's 
possible membership in the Partnership for Peace (PfP).  New DIKO VP 
Nicolas Papadopoulos severely criticized Christofias's handling of 
the Cyprus issue and promised he would push for changes in approach. 
  Christofias's positions were inspired by the Annan Plan, he 
accused, while the Turkish Cypriot side was pushing for a two-state 
solution -- anathema to Greek Cypriots. 
 
¶5.  (SBU) Most experts believe Karoyian has no choice but to align 
with the party hard-liners.  Opposition daily "Politis" wrote on 
March 17 that Karoyian was a "hostage" of the pro-Papadopoulos camp, 
and that one of their immediate goals was the inclusion of a DIKO 
representative in Christofias's negotiating team.  A newly-elected 
member of the Executive Office, former Minister of Education Akis 
Cleanthous, confirmed in a meeting with PolOff on March 19 that 
getting a seat at the negotiating table was indeed the top priority 
of the new DIKO Executive Office. 
 
--------------------- 
Christofias in a bind 
--------------------- 
 
¶6.  (SBU) A Presidential Palace source told the Embassy on March 19 
that Christofias was gravely concerned over the outcome of the DIKO 
election.  He reported that Christofias has no other option but to 
be flexible with DIKO; otherwise, he will "throw it into the arms of 
the opposition [DISY]."  Former Justice Minister and Government 
URBANCIC 
 
NICOSIA 00000200  002.2 OF 002 
 
 
Spokesman Kypros Chrysostomides, once a DIKO leader and now a close 
ally of Christofias, predicted on March 18 that DIKO would withdraw 
from the government, perhaps even before the European Parliament 
elections in June 2009.  He argued that, in such an eventuality, the 
third coalition partner, socialist EDEK, might follow suit. 
Chrysostomides did not expect that developments in DIKO would impact 
Christofias's Cyprus problem policy significantly, however, since he 
believed the President would prefer to drive DIKO out of the 
coalition than to move away from the solution process. 
 
¶7.  (SBU)  DISY has tried to build bridges with DIKO in hopes the 
latter will abandon the government coalition.  DISY leader Nikos 
Anastassiades on March 15 publicly invited DIKO to join the European 
People's Party Group in the European Parliament -- of which DISY is 
a member -- and committed himself to supporting DIKO's application 
without any preconditions.  Anastassiades also underlined a number 
of common positions shared by the two political parties, on the EU's 
Lisbon Treaty, PfP, education reform, and economic policy.  A DISY 
source told the Embassy that Anastassiades's attempts to co-opt DIKO 
would not affect his support for Christofias's settlement efforts, 
however. 
 
------- 
Comment 
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¶8.  (SBU) With or without Karoyian's blessing, the new DIKO crew 
will press Christofias for an increased role in CyProb 
decision-making, as well as on secondary issues like education 
reform.  It will take very skillful maneuvering on the President's 
part to keep DIKO in the pro-government coalition without making 
major compromises on vital policy issues, especially if DISY 
continues its effort to woo DIKO. 
URBANCIC