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Cablegate: Cyprus: Where We Are at the Start of Formal Talks

VZCZCXYZ0002
OO RUEHWEB

DE RUEHNC #0703/01 2461355
ZNR UUUUU ZZH (CCY ADD0C532 MSI1130-695)
O 021355Z SEP 08
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9111
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 1209
RUEHBS/USEU BRUSSELS

UNCLAS NICOSIA 000703

SENSITIVE
SIPDIS

C O R R E C T E D COPY CAPTION
DEPARTMENT FOR EUR/SE, EUR/ERA, IO/UNP

E.O. 12958: N/A
TAGS: PGOV PREL UN UNFICYP CY TU
SUBJECT: CYPRUS: WHERE WE ARE AT THE START OF FORMAL TALKS

1. (SBU) SUMMARY: At rock-bottom of a four-year impasse,
few believed on January 1 that full-fledged Cyprus Problem
negotiations would recommence during 2008. In the eight
months since, however, Greek Cypriots dumped their
intransigent leader and replaced him with freer-thinking
Demetris Christofias, Turkish Cypriots regained a bit of
their pro-solution bent, the international community took
greater interest in reaching a solution, the local UN mission
became re-energized around a new, well-liked leader, and
pundits on both sides proclaimed conditions more favorable
than ever to reunify the island. After sixteen weeks of
preparatory, technical-level talks and four meetings between
Christofias and T/C counterpart Mehmet Ali Talat, the sides
on July 25 called on the UN to renew its Good Offices
mission, which commences September 3 in Nicosia in the
presence of newly-named UN Special Advisor Alexander Downer.

2. (SBU) The sides, substantive positions are well known.
In exchange for giving ground on governance, power-sharing
and economic issues, G/Cs will demand T/C concessions on
territorial adjustments, property restitution, and Turkish
troop withdrawal. While a cautious optimism prevails on both
sides of the Green Line -- Talat, for example, continues to
claim a settlement is do-able before year,s end -- areas of
substantive discord continue to exceed points of convergence,
and the level of inter-communal bickering has spiked in
recent weeks. As such, all signs point to long and tough
negotiations before any breakthrough is reached. Post will
offer Septel suggestions on "managing" the process and
avoiding some of the pitfalls encountered during and after
the 2002-2004 "Annan Plan" effort. END SUMMARY.

---------------------------
Quite the Turnaround in 08
---------------------------

3. (SBU) Two thousand eight began with pro-solution forces
on both sides of the Green Line -- and in the international
community -- fighting depression. Hard-line Greek Cypriot
leader Tassos Papadopoulos had emerged on top in all but one
of 50-odd pre-electoral polls and looked a shoo-in for
re-election, boding poorly for renewed settlement
negotiations. In the north, Turkish Cypriots were focusing
greater attention on ending their economic and social
isolation and winning pseudo-recognition for their community
than on engaging the ill-trusted Papadopoulos. Despite
brokering over 50 meetings of the sides, negotiators,
UNFICYP had proven unable to activate the &July 8 (2006)
Agreement,8 and Special Representative of the Secretary
General Michael Moller was fighting unrelenting Turkish
effort to remove him for alleged pro-G/C bias. Another year
of stalemate seemed likely, with the international community
growing even more fatigued over the Cyprus Problem.

4. (SBU) A sea change ensued. Papadopoulos surprisingly
lost in February, replaced by the pro-solution Communist,
Christofias. The new RoC President reached out early to
fellow comrade Talat, and within a month of inauguration, the
Working Groups and Technical Committees envisioned in July 8
came together and began work. The unfairly-tarred but
well-meaning Moller retired, replaced by a soft-spoken but
jointly accepted Ethiopian UN diplomat, Taye-Brooke Zerihoun.
In a show of renewed, high-level UN interest in Cyprus,
Under Secretary for Political Affairs Lynn Pascoe visited the
island twice, and the Secretary General tapped former
Australian FM Alexander Downer as his special adviser on
Cyprus. A chemistry developed between the two Cypriot
leaders in the course of four meetings in spring and summer,
with each showing flexibility and making compromises in the
joint statements that followed the sessions. Hard-liners,
public reactions on both sides made clear that progress in
future, substantive negotiations would be difficult, however.
On July 25, Talat and Christofias called on the UN Secretary
General to renew his Good Offices mission and announced that
full-fledged negotiations would commence on September 3.

-------------------------
Sides Arrayed As Expected
-------------------------

5. (SBU) In the UN-brokered sessions, the leaders attempted
to paint a broadest-brush picture of the reunited island.
Talat drew &first blood8 on May 23, as the leaders,
communique described the new state as a partnership with
constituent states of equal status, long-time T/C demands.
Christofias evened the score on June 1 by securing a G/C
necessity that the reunified nation have a single citizenship
and sovereignty. In zero-sum Cyprus, however, each
&victory8 was portrayed as a crushing defeat in the

opposite community, and hard-liners complained that their
respective leaders were abandoning long-held principles.

6. (SBU) Progress varied considerably in the working groups
tasked with studying substantive aspects of the Cyprus
negotiations (the technical committees tackling matters of
day-to-day life on the island delivered more uniform
results). &Grades8 ranged from &A-& for EU Affairs,
Economic Matters, and Governance/Power Sharing, to
don,t-show-Dad-the-report-card for Security/Guarantees,
Territory, and Property. As the groups broke for the August
recess, a conventional wisdom emerged. The leaders in
September were expected first to tackle the low-hanging fruit
(governance, specifically) in order to build negotiating
momentum and trust, and then move to tougher issues like
property.

7. (SBU) Greek Cypriot contacts offered the following
explanation why great advances had occurred in three working
groups, but not the others. On developing a joint economy,
managing the EU relationship, and transforming the Republic
from a unitary to a federal state, the G/C side was all give,
no take -- in other words, the fundamental issue was how to
devolve a degree of power and authority to Turkish Cypriots.
Regarding property returns, territorial adjustment, and the
question of Turkish troop presence and a continued guarantor
right for Ankara, however, the G/C side depended on its
opposite,s largess -- and on the acquiescence of Turkey;
hence, the paucity of progress. Whether true or not, this
does describe the sides, positions as full-fledged talks
begin: G/Cs will seek to minimize their concessions on
governance, the economy, and EU matters by arguing, for
example, for strong federal institutions and weaker
constituent states, a unified economy with a single central
bank and few derogations on competition and capital movement,
and a single representation in Brussels. Conversely, on
property, territory, and security/guarantees, Christofias
will aim for full right-of-return for refugees, a Greek
Cypriot constituent state whose size is faithful to the
island,s 1960 population breakdown (80 percent G/C), and an
early withdrawal of all Turkish troops and end to Turkey,s
guarantor role. As expected, T/C positions differ from G/C
ones by 180 degrees.

---------------------------------
Hopes in Hearts, Worries in Minds
---------------------------------

8. (SBU) A cautious confidence reigns on the island amongst
locals and internationals on the eve of negotiations. Of the
two leaders, Talat appears the more optimistic, regularly
voicing his belief that a solution is reachable in 2008.
Perhaps he hopes to create a self-fulfilling prophecy, as his
political future, more so than Christofias,s, depends on
positive CyProb movement. The G/C leader also asserts the
sides can reach agreement -- but only if Turkey gives Talat
room to maneuver. His is a familiar Greek Cypriot refrain:
Greek- and Turkish Cypriots could coexist productively and in
peace, if only the Turkish &Attila8 would withdraw.

9. (SBU) Skeptics see plenty of potential potholes in the
negotiating road ahead, however. They include:

-- A decaying negotiating climate on the eve of talks.
Spokesmen Stephanos Stephanou (G/C) and Hassan Ercakica (T/C)
are trading allegations doubting the other side,s sincerity
and determination to reach a fair solution. Not one of the
nearly 20 confidence-building measures (CBMs) announced in
July has been implemented, to the UN,s great dismay. And
the T/C side refused to open a Buffer Zone crossing route at
Limnitis to allow Greek Cypriot celebrants to attend Mass at
St. Mamas Church in Morphou on September 2, even though two
weeks earlier the G/C side had allowed a much-larger,
southbound passage of Turkish Cypriots via the same route.
The T/C decision caused G/C negotiator George Iacovou to
storm out of the representatives, August 29 meeting and
resulted in the cancellation of the St. Mamas Mass. A wave
of negative press has followed, with pro-solution G/Cs
feeling betrayed and the hard-liners vindicated.

-- Questionable Support from Elements of Turkish
Establishment: Most Embassy contacts canvassed attribute the
negative Limnitis decision not to Talat, but to the Turkish
military. Greek Cypriot leaders and media have questioned,
&if the TGS refuses to open one checkpoint to seventy Greek
Cypriots for a couple of hours, citing security concerns, how
will they ever agree to withdraw from the island after a
settlement?8

-- Politically Weak T/C Leadership: Talat,s approval
ratings continue to drop, although an imploding Turkish
Cypriot economy and poor domestic governance, rather than his
CyProb stewardship, deserve most blame. Recent polls show
the hard-line, nationalist UBP garnering greater support than
Talat,s CTP, and early &parliamentary8 elections in 2008,
while unlikely, could still occur. Talat therefore must not
appear too conciliatory or willing to &sell out the TRNC,8
lest he open himself to attacks from the nationalist right.

-- Christofias Stronger with Enemies than Allies: The Greek
Cypriot leader enjoys greater support for his CyProb approach
from opposition DISY than from his &alleged8 allies EDEK
and DIKO. The latter organizations still smart from
Papadopoulos,s February defeat, and the former President,s
solution ideology -- &total victory is the only victory,8
and a preference for the status quo over an imperfect but
still mutually-beneficial outcome -- still resonates among
their leaders. EDEK and DIKO will pounce should Christofias
cross G/C red lines, as on July 1 when he approved the
&partnership8 state arrangement.

-- A False Sense of Progress from the Preparatory Phase:
Christofias and Talat on July 25 &undertook a final review
of the work of the Working Groups... and decided to start
full-fledged negotiations on September 3.8 The drafters
deliberately avoided the phrase &and based on their results,
decided to start...8 for good reason. The sides, positions
on three of the four core CyProb issues --
security/guarantees, property restitution/compensation, and
territorial adjustment -- remain as disparate as before the
process started. That Christofias gave the green light for
formal talks had little to do with careful analysis of
working group progress, but rather was a political decision
true to his pro-solution ideology.

-- Procedural Framework Still in Question: Barely a week
before the substantive start of negotiations on September 11,
neither the sides nor the UN know what to expect in the
negotiating rooms. Iacovou and Nami were to have ironed out
a short-term game plan in the run-up to September 3, but
their meetings proved acrimonious and borderline-productive
(August 27) or abortive (August 29). UNFICYP contacts inform
they will continue their facilitative, not directing role,
which might work fine in areas of convergence, such as
governance/power sharing where the sides have issued a joint
roadmap for talks. But on more contentious subjects, the G/C
side, for domestic political reasons, is not yet ready to
grant the UN, the guarantor powers, the U.S., or any other
party greater authorities.

--------------------------------------------
Recognizing Threats to Momentum, Sides React
--------------------------------------------

10. (SBU) Despite the recent bickering and flap over
Limnitis having raised temperatures in both communities,
their leaders are trying to maintain positive momentum as the
formal talks begin. G/C Spokesman Stephanou on August 31
called on Greek Cypriots &to remain responsible and not
damage our own side,s positions (by overreacting on
Limnitis); let us not allow this issue to become THE issue.8
Remarks from T/C PR and media-types were similar. Between
the lines, their message read: these negotiations are
certain to be long and arduous, and the sides, numerous red
lines will generate regular &crises8 to test the patience
of all parties to the conflict.
Urbancic

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