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Cyprus And The European Union
The Cyprus the world is watching is only half of Cyprus; the Greek-speaking half which joined the European Union on the first of May 2004 as the Republic of Cyprus. It controls about 59 per cent of the island. The rest is part of the Turkish Republic of Northern Cyprus. After decades of communal violence between Greek and Turkish Cypriots the Greek Nationalists, with the support of the Greek military junta in Athens attempted a coup in 1974 to unite Cyprus with Greece (Enosis) to put the island firmly under Greek control. Nicki Sampson overthrew the government of Makarios and fought to take over Turkish-speaking territories on the island with the support of the Greek army. The Turks (who had been waiting for such an opportunity) sent airplanes over the island and bombed Greek Cypriot positions. Hundreds of Turkish parachutists land in Turkish-areas. 30 Turkish troop ships protected by destroyers landed 6,000 men as well as tanks, trucks, and armoured vehicles on the island. The Cypriot Greeks demanded a cease-fire. The Turks landed another 30,000 troops on the island.
Peace talks were begun in Geneva but in August 1974, the Turks renewed their attack, taking over more key cities. The Greek Cypriots were no match for the Turkish troops (supplied with the latest US equipment). Peace was finally restored but 180,000 Greek-Cypriots had been evicted from their homes in the north. At the same time, around 50,000 Turkish Cypriots moved to the areas under the control of the Turkish Forces and settled in the properties of the displaced Greek Cypriots.
The invasion was devastating to the Cypriot Greek economy. The creation of the Turkish Cypriot Republic caused Cypriot Greeks to lose 65 per cent of its hotels, 87 per cent of its holiday complexes, 40 per cent of its schools, 48 per cent of its agricultural exports and 56 per cent of its beaches.
With the support of the Greeks, Cyprus applied for membership in the European Union and, along with nine other states, joined the European Union, and the euro when it was established. While Cyprus has felt the full impact of the decline in the fortunes of the euro and the strict austerity measures which dropped Greece into a financial crevasse, the Turkish side of Cyprus has done very well in a haven of financial security, thanks to the sound policies of the Turkish government. The Cypriot accession to the European Union has not been an unmixed blessing.
One of the important questions that have always troubled analysts is to why the Turks invaded in such strength. One of the key reasons for this is because the US had indicated to Turkey its support for the invasion in advance. In the 1970's as declassified US Government documents recently revealed, then-US Secretary of State Henry Kissinger actively encouraged and facilitated arms to the Turkish regime of Kissinger's former Harvard student and then Turkish Prime Minister Bulent Ecevit, to stage a military invasion of Cyprus; in effect partitioning the island between an ethnically Turkish north and an ethnically Greek Republic of Cyprus in the south; a division which remains. The Kissinger strategy, backed by the British, was believed intended to create a pretext for a permanent US and British military listening post in the eastern Mediterranean during the Cold War and as a reaction to the strength of the Russian activity on the island.
The US has continued its efforts to diminish the stranglehold of Gazprom and the Russians on the supply of gas to Europe. Cyprus plays an important role in this effort. The discovery in late 2010 of the huge natural gas bonanza off Israel's Mediterranean shores triggered other neighbouring countries to look more closely at their own waters. The results revealed that the entire eastern Mediterranean is swimming in huge untapped oil and gas reserves. That discovery is having enormous political, geopolitical as well as economic consequences. Preliminary exploration has confirmed similarly impressive reserves of gas and oil in the waters off Greece, Turkey, Cyprus and potentially, Syria.
In July 2011, Secretary of State Hillary Clinton flew to Athens with her Special Envoy for Eurasian Energy, Richard Morningstar. Morningstar, along with his controversial aide, Matthew Bryza, have been the key Washington architects of Washington's geopolitically-motivated oil and gas pipeline projects that would isolate Russia and its Gazprom gas resources from the EU. Bryza is an open opponent of Russian Gazprom's South Stream gas pipeline that would transit the eastern Mediterranean states. Clearly the Obama Administration is not at all neutral about the new Greek oil and gas discoveries. Three days after Hillary left Athens, the Greek government proposed creation of a new government agency to run tenders for oil and gas surveys and ultimate drilling bids.
Morningstar is the US specialist in economic warfare against Russian energy diplomacy. He was instrumental in backing the controversial B-T-C oil pipeline from Baku through Tbilisi in Georgia across to the Turkish Mediterranean port of Ceyhan, a costly enterprise designed solely to bypass Russian oil pipeline transit. He has openly proposed that Greece and Turkey drop all historic differences over Cyprus, over numerous other historic issues and agree to jointly pool all their oil and gas reserves in the Aegean Sea. He also has told the Greek government it should forget cooperation with Moscow on the South Stream and Bourgas-Alexandroupolis gas pipeline projects.
According to a report from Greek political analyst Aristotle Vassilakis published in July 2011, Washington's motive for pushing Greece to join forces with Turkey on oil and gas is to force a formula to divide resulting oil and gas revenues. According to his report, Washington proposes that Greece get 20 per cent of revenues, Turkey another 20 per cent and the US-backed Noble Energy Company of Houston Texas, the company successfully drilling in the Israeli and Greek offshore waters, would get the lion's share of 60 per cent.
Today the Greek Cypriot portion of Cyprus, where Noble has discovered large gas deposits, is a member of the European Union. Its President (until a few weeks ago) was Demetris Christofias; the only national leader in the European Union who is a communist. He is also a close friend of Israel, and of Russia. In addition, he is a major critic of American foreign policy, as well as of Turkey.
Turkish-Israeli relations, once quite friendly, have become increasingly strained in recent years under the Erdogan foreign policies and the Marmara incident. Ankara has expressed concern about Israel's recent ties with its historic antagonists, Greece and the Greek side of Cyprus. Turkey's ally the Turkish Republic of Northern Cyprus, fears it could miss out on its fair share of the gas after Israel and Nicosia signed an agreement to divide the 250 kilometres of sea that separate them.
The existence and potential of these gas fields and the possibilities of a major joint gas pipeline routing to Europe is a threat to Russia and the interests of Gazprom. This is why the Russians have proposed an agreement with Cyprus seeking a monopoly of Cyprus gas finds in exchange for funding and why the Cypriots could not agree.
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Conclusion
So the current debate about Cyprus's bailout is very important for reasons other than the fiscal tranquillity of the eurozone. It is an epicentre of international political and military conflict in addition to its economic aspects. These considerations are very likely to determine the outcome of the negotiations currently underway.