The last round of Cyprus’s drawn-out peace process ended in April 2004 when the Greek Cypriot community, which had long advocated reunification of the divided island on a bicommunal and bizonal basis, overwhelmingly rejected the UN-sponsored “Annan Plan”, which provided for just that. At the same time on the northern side of the Green Line, the Turkish Cypriot community, in a major reversal of its traditional preference for secession, backed reunification. The failure of the referendum did not stop a still-divided Cyprus being admitted to membership of the EU a week later. Notwithstanding clear continuing support for the Annan Plan, or some variation of it, among all other members of the EU and the wider international community, the present situation remains stalemated.

Given that no negotiated settlement is presently in sight, the only way forward appears to be a series of unilateral efforts by the relevant domestic and international actors, aimed at sustaining the pro-solution momentum in the north, inducing political change in the south, and advancing inter-communal reconciliation. External players should, to the extent of their capacity, seek to exert pressure upon the political elites of both communities for immediate recommencement of negotiations and do everything possible meanwhile to reduce the isolation of the north.

The best-case outcome, manifestly in the interests of both sides and their regional neighbours, would be for Greek and Turkish Cypriots to make further efforts to reunify Cyprus within the broad framework laid down in the Annan Plan. With its detailed and comprehensive provisions, its tightly forged compromise arrangements and its distillation of three decades of negotiations, some new variation of that Plan, built around the concept of a bizonal and bicommunal federation as originally agreed by Archbishop Makarios and Rauf Denktash in the 1970s, is the only proposal that seems ultimately capable of common acceptance.

The most substantial blockage of such an agreement is now the policy and attitude of the Greek Cypriot leadership and in particular of President Tassos Papadopoulos. They should realise that if they persist in their refusal to engage with the United Nations and with Cyprus’s other international partners, the island will slip by default toward permanent partition and the independence of the north, whether formally recognised or not. The idea that Turkish Cypriots will instead accept minority status in a centralised Greek Cypriot state is a pipe dream.

Confidence building measures cannot, in the present environment, realistically be negotiated. But they can still be undertaken unilaterally. Political leaders are always reluctant to make concessions not immediately reciprocated, but these can sometimes be very much in the longer term national interest. The argument of this report is that the best hope of changing the dynamics of the Cyprus conflict, and creating an environment in which a UN-brokered solution can once again be contemplated and the best interests of all parties advanced, is for the following measures, and approaches, to be taken by the key players:

• The EU, UN and U.S. have important roles in creating an atmosphere where progress may be possible. In 2004, the UN Secretary-General, the EU Council of Ministers and the U.S. Secretary of State all called for ending the north’s isolation; their words should now be followed by deeds. The EU, for all the difficulty of acting in the face of Cypriot vetoes, has a particular obligation to sustain by every available means the economic development and European integration of northern Cyprus as it pledged to do in April 2004. The Commission, Council, Parliament and other member states should implement the new funding instrument for northern Cyprus, and press for the establishment of a branch of the Commission’s delegation in the north to oversee its delivery and the inclusion of northern Cyprus in the EU’s customs union with Turkey. The U.S. similarly should upgrade its existing office in the north. Lifting the isolation of the north is key to promoting a long-term and sustainable solution based on equality.
   
• Greek Cypriots need to refocus on the core issues, recognise that a centralised state is a recipe for endless further domestic and regional instability, accept that the roots of the Cyprus conflict lie as much in 1963 as 1974, acknowledge that it is not only they who have been uprooted from their homes and mourn their missing, and look again at the advantages of giving practical effect to the bizonality and bicommunality principles they agreed to three decades ago. Given the uncompromising position taken by the present government, the critical role here in generating debate must be played by the Greek Cypriot opposition, moderates on all political sides and civil society leaders.
   
• Greece, similarly, must review its historic approach. The attitude of successive governments that “Cyprus decides, Greece follows” is anachronistic and unhelpful: Greece needs to move on from its politics of silence, once more clarify to the international community its stance towards the Annan Plan as the basis for recommencing negotiations and finding a solution, and be prepared to take a lead within the EU to refocus efforts on discharging the Union’s obligations to its Turkish Cypriot citizens.
   
• Turkish Cypriots should through their government address the outstanding property cases, harmonise laws and practices in line with the EU’s acquis communautaire, extend de facto the EU-Turkey Customs Union to the north and encourage Turkey to reduce its military presence as well as the number of Turkish settlers from the mainland who have migrated to the northern part of the island in the past three decades. The Turkish Cypriot side should show more understanding of Greek Cypriot demands with regard to the issues of missing persons and the restoration of damaged cultural monuments, in order to demonstrate that it is intent on resolving past disputes and willing to ease the costs of reunification and the pain of those who have suffered from the events of 1974.
   
• Turkey should unilaterally undertake a number of confidence building measures to confirm its commitment to a settlement. It should proceed with its existing EU commitments, including full implementation of the Customs Union with all 25 member states. The partial withdrawal of some of the 35,000 troops stationed in the northern part of the island would be an important step in easing the fears of the Greek Cypriots, without threatening Turkey’s security interests. And it should commit to the drafting of a plan for repatriation of a number of settlers once a census has been held.

Brussels/Nicosia, 8 March 2006