Cyprus reunification to cost €20-25 billion (The Cyprus Weekly, 9 October 2015)
By Esra Aygin
The total cost of a bizonal, bicommunal federal solution in Cyprus will be an estimated €20-25 billion said Baris Burcu, the spokesperson of Turkish Cypriot leader Mustafa Akinci.
Options for raising funds for financing the solution were among the main issues discussed during the meetings held by the Turkish Cypriot leader and his team in New York last week on the sidelines of the 70th session of the General Assembly of the United Nations, Burcu said.
The figure of €20-25 billion includes the compensations that will have to be paid as part of the solution of the property problem; the amount that will be needed for the relocation and resettlement of those who will have to move due to territorial adjustments; the cost of establishing the federal structures of a united Cyprus; and the investment needed to bring the northern part of Cyprus into conformity with European Union standards.
The Turkish Cypriot side was pleased to see that the international actors are very willing to help finance a solution, Burcu said.
“This money will mainly come from donations and long-term loans from international institutions,” he added.
“And of course, there will be an opportunity to maximise the currently depressed values of Greek Cypriot properties in the north and the Turkish Cypriot properties in the south.”
There are efforts on different fronts for building economic support for a settlement, including by UN Secretary General Ban Ki-moon’s Special Advisor on Cyprus Espen Barth Eide, the United States and the European Union, Burcu said.
In fact, there have been some encouraging messages from a number of actors regarding the financing of a solution in Cyprus.
Most recently, United Kingdom’s Foreign Secretary Philip Hammond stated that his government is working with international partners in order to financially support a settlement in Cyprus.
“We have undertaken to work with our partners in the EU, with the United States, to ensure that the international community is able to mobilise to support a settlement with the necessary financial underpinning,” Hammond said last Sunday, addressing an event on the sidelines of the Conservative Party’s annual conference.
“I think you can rely on the USA, the UK, the EU to come together to support a settlement.”
During his visit to Cyprus in July, European Commission President Jean-Claude Juncker had also pledged that the EU would financially assist Cyprus when a solution is found.
“The Commission will be there when it comes to the financial consequences of the unification,” Juncker stated.
“As a matter of principle, I indicated to the two leaders and to those who are with them that the Commission at the very end of the process will be deeply involved in the financial consequences of the reunification.”
A significant portion of the €20-25 billion will constitute compensations to resolve the property issue, said spokesperson Baris Burcu.
The Turkish Cypriot side maintains that the bizonal and bicommunal character of a future federal Cyprus means that the Turkish Cypriots would have population and property ownership majority in the Turkish Cypriot constituent state, and the Greek Cypriots would have population and property ownership majority in the Greek Cypriot constituent state. This consequently means that the property issue will have to largely be solved through compensations.
Turkish Cypriot leader Akinci, following his meeting with UN Secretary General Ban in New York last week had stated: “The property regime should not disrupt social order. The remedies will be mainly through compensation.
“Therefore, we will need to focus on the financing of the comprehensive settlement.”
Burcu said that there is an understanding between the Turkish Cypriot and Greek Cypriot leaders that the property issue will have to be solved mainly through compensations.
“But the sides have not yet determined the criteria, which will serve as a basis for deciding which of the three remedies – compensation, exchange and reinstatement – will be applied in each case,” Burcu added.
Turkish Cypriot leader Mustafa Akinci and Greek Cypriot leader Nicos Anastasiades agreed on June 27 that the individual’s right to property – both the original owner’s and the current user’s – will be respected and that the exercise of this right will be regulated through compensation, exchange and reinstatement decided on by a property commission based on mutually agreed criteria.