AHI Policy Forum Explores Goals, Challenges of Cyprus EU Presidency

WASHINGTON, DC —The American Hellenic Institute (AHI) hosted the policy forum “Cyprus and the EU Presidency: Institutional, Political, Strategic and Economic Challenges” featuring a panel of experts who examined various aspects of the topic on July 18, 2012 at the Capital Hilton, Washington, DC. Ambassador Pavlos Anastasiades, ambassador of the Republic of Cyprus to the U.S., provided remarks and participated in a Q&A with the audience.

“It is the first time since Cyprus joined the EU in 2004 that it will hold the EU presidency,” said AHI President Nick Larigakis. “This historic event presents Cyprus with significant challenges yet great opportunities. Our expert panelists were able to provide us with in-depth analysis about the meaning of Cyprus’ EU presidency, the challenges Cyprus will face, and how Cyprus was able to rise from the tragedy of an illegal invasion and occupation to assume its current leadership position.”

The panel featured: Professor Van Coufoudakis, rector emeritus, University of Nicosia and dean, of the School of Arts and Sciences, Indiana University-Purdue University; Dr. Antonio de Lecea, minister for Economic and Financial Issues, Delegation of the EU to the U.S.; Bill Loveless, host, Platts Energy Week; and former Ambassador to NATO Kurt Volker, managing director and senior fellow, Center for Transatlantic Relations, SAIS-Johns Hopkins University and executive director, McCain Institute for International Leadership, Arizona State University. Paul Glastris, editor-in-chief, The Washington Monthly, moderated the panel.

Each of the four panelists brought their unique perspective and expertise to the seminar topic.

Speaking on “How Cyprus Evolved from 1974 to What it is Today,” Professor Coufoudakis presented an overview of Cyprus’ evolution from independence in 1960 to become a vibrant liberal democracy despite external interferences over the decades. He also provided a timeline of Cyprus’ journey to EU ascension in 2004, which began with a formal application in 1993. Coufoudakis noted important milestones along the way, including in 1997 when it was determined a divided Cyprus could enter the EU and 1998 when Turkish Cypriots were invited to join the negotiating team but declined. He also cited instances that provided encouragement for Cyprus’ EU membership, including Greece’s role to lift its veto of Turkey’s EU candidacy in 1999 and Shimon Peres stating Cyprus would be the European Union’s anchor in the eastern Mediterranean. Moreover, Coufoudakis provided recent examples of Turkey’s non-recognition of EU-member Cyprus, including its refusal to recognize the sovereignty of Cyprus under international law and three Law of the Sea treaties which are part of EU law, and Turkey’s refusal to open its ports to Cyprus.

In conclusion, Professor Coufoudakis reflected on the Annan Plan stating, “No self-respecting country in 2012 would accept a proposal similar to the Annan Plan just to placate Turkey.” He also rebutted the current efforts to find a Cyprus solution under the auspices of the UN’s Special Adviser on Cyprus Alexander Downer.

Minister Dr. de Lecea’s topic, “The Cyprus Presidency: What it Means for the EU, its Role and Responsibilities amid the EU Crisis,” focused on explaining the demands of the EU presidency, the current context in which Cyprus assumes the helm of the EU presidency, and what the Cyprus EU presidency must do with regard to the economic crisis engulfing Europe.

“It’s a challenge,” he said. “There is a high workload and it is a demanding six months, especially for a country holding the presidency for the first time.” He added that the EU presidency provides a country the opportunity to test itself, share its assets, and demonstrate its capabilities.

Dr. de Lecea described the context in which Cyprus has assumed the EU presidency as a “perfect storm” with a convergence of issues to address, ranging from fiscal and financial matters (poor regulations and unsustainable budgets) to competitiveness (market rigidity) to an incomplete institutional framework (no single supervision). He expects the Cyprus EU presidency to respond to the challenges along three axes: restoring growth, advancing integration and fiscal stability. Dr. de Lecea added the Cyprus EU presidency must work to advance proposals such as enhancing surveillance, completing financial regulations, and completing banking supervision and a deposit guarantee system to respond to the challenges the EU is facing.

In his remarks on the topic, “The Cyprus Energy Findings and the Implications for the EU,” Loveless revealed he was stunned to learn of the potential yield of energy resources available off Cyprus following an interview he conducted with Cypriot Foreign Minister Erato Kozakou-Marcoullis. According to a U.S. Geological Survey, the eastern Mediterranean may contain as much as 500 trillion cubic feet of natural gas. Loveless believes this amount can compete with the potential of other regions around the world. As a result, he observes Nicosia “moving aggressively” to explore ways to get the gas out of the eastern Mediterranean although a timetable to do so is unclear. Loveless offered 2018 as the earliest possible date. In his presentation, Loveless also discussed potential markets to sell the oil and gas identifying Europe as a “prime candidate.” However, he did not rule out Asia as a better bet as a market when one considers China and Japan. Loveless also touched upon three areas that the Cyprus EU presidency should focus upon for the EU: 1) making a priority the safe exploration and excavation of offshore oil and gas, 2) addressing emissions trading and nuclear safety, and 3) addressing the uncertainty of European demand. He concluded by paraphrasing from The Economist that gas is changing the geopolitics of the region, and it’s time for Europe to wake up and smell the gas.

Ambassador Volker concluded the panel with a presentation on “The Geostrategic Importance of the Region vis-à-vis the Cyprus EU Presidency.” The ambassador emphasized the importance of Europe and the European Union stating that Europe is the biggest trading partner for the United States and a source of jobs. “Europe is a principal contributor to problem solving in the world,” he added.

In addressing the challenges the Cyprus EU presidency will face in the fiscal and financial sectors, Ambassador Volker believes Cyprus will not be the leading voice on shaping solutions for the euro crisis. Instead, Cyprus must present a surface of leadership, an external face for the EU, keeping it together during the next six months. There are other challenges the Cyprus EU presidency will face, said the ambassador, including implementing portions of the Lisbon Treaty and looking beyond Europe to hot spots such the Syria crisis. Regarding the latter, Cyprus is closest to Syria in Europe and a potential military response to the Syria crisis with Turkey would pose a tremendous challenge given Turkey’s non-recognition of the Cyprus EU presidency. In addition, the Syria crisis could spill over to Lebanon, and again, Cyprus has close proximity to Lebanon.

Ambassador Volker added that Cyprus must provide some leadership on broader issue areas such as: security and counter-terrorism, withdrawal from Afghanistan, and the global economy; and address issues specific to Cyprus including country size issues with France and Germany, energy issues and the potential for conflict with them. The topic of working with Russia was also discussed by the ambassador, who said Russia was interested in Cyprus’ energy sector.

During the forum’s Q&A session, the topics of EU-Turkey relations and the Cyprus-Israel gas relationship were discussed. On the former topic, Ambassador Volker offered that Turkey is feeling confident, perhaps overconfident, and is “quite happy to be out of the EU.” Professor Coufoudakis added, “The EU has to have the political guts to stand up to Turkey for what it believes.”

Ambassador of the Republic of Cyprus to the United States Pavlos Anastasiades also provided a response during the Q&A session. He described the Cyprus EU presidency as a “confirmation that Cyprus is an equal sovereign state” in Europe and a “historic, momentous occasion.” Ambassador Anastasiades stated Cyprus will be an “honest broker” in its role as the EU presidency, working on common European interests and not promoting Cyprus’ national interest. He cited as an early example of the Cyprus EU presidency’s work that a 2013 budget agreement has been secured. “We want to continue promoting a balanced approach: fiscal consolidation, growth, integration,” he said.

On energy issues, Ambassador Anastasiades stated that Cyprus’ actions to explore hydrocarbon reserves within its exclusive economic zone (EEZ) in the eastern Mediterranean are consistent with international law and are for the whole of the island. Turkey’s claims in Cyprus’ EEZ are “groundless,” he said.

The ambassador also commented on the Cyprus issue, adding that the Cyprus EU presidency can facilitate efforts to solve the issue because the EU provides the framework for a solution.

Part One of the Policy Forum can be viewed below:

Part Two of the Policy Forum can be viewed below:

Photos of the Policy Forum:

The American Hellenic Institute (AHI) is a non-profit Greek American think-tank and public policy center that works to strengthen relations between the United States and Greece and Cyprus, and within the Greek American community.

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For additional information, please contact Demetra Atsaloglou at (202) 785-8430 or at pr@ahiworld.org. For general information about the activities of AHI, please see our website at https://www.ahiworld.org.