Better policies for a competitive and fair Europe


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Better policies for a competitive and fair Europe

A report on the Cyprus Presidency of the Council of the European Union - More Info: European Voice.

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Better policies for a competitive and fair Europe

  1. 1. 16 21 June 2012SPECIAL REPORTThe Cypriot presidency of the EUTimes are diffi- ARCHIVE it will boycott the presidency in its entirety. The Turkishcult, but success Cypriots are largely ignoring the presidency. But the dan-is not beyond ger remains that Cyprus’sCyprus’s reach as non-relations with Turkey will surface as a takes over the Any presidency’s inten- tions can be blown off coursepresidency of the by unexpected challenges.EU, writes And Cyprus’s aspirations to be an honest broker wouldAndrew Gardner mean little if it lacks the staff to broker deals. For Cyprus,Cyprus starts out on its pres- the challenge is all the greateridency of the European because it is, geographically,Union’s Council of Ministers the most remote presidencyknowing that expectations that there has ever been.are low and apprehension is The national air carrier hashigh. The intractable division responded by setting up sixof its Greek south and Turk- direct flights a week fromish north has made Cyprus a Nicosia to Brussels for thesynonym for division. This duration of the presidency,presidency will be adminis- but the main decision hastered only by the Greek been to make this a Brussels-Cypriot government, which based presidency. Informalrules over a population of just ministerial meetings will be800,000. The permanent held in a conference centre in Right place, wrong time?representation to the EU Nicosia, newly revamped fornormally numbers just 80 the presidency, but almost allpeople. other meetings will be held in Even in ordinary times, Brussels. The permanentthese handicaps would make representation in Brusselsthe presidency a challenge. has been swollen to 230 peo-But these are not the best of ple for a year, by re-deployingtimes: the eurozone is in cri- fective. Hungary’s Prime ment points out that it has tural or Fisheries Policies. caused Cyprus not to recog- civil servants who normallysis, neighbouring Greece is Minister Victor Orbán fo- just one national priority, an Cyprus contributes more nise Kosovo as a state. It even work in turmoil and, just half a cused on his domestic inter- integrated maritime strategy than it receives from the EU’s contributes to the closeness This mobilisation, whichday’s boat trip away, Syria is ests, and treated the presi- (see opposite page). The rest budget, which, politically, of Cyprus’s relationship with includes the creation of a postin flames. dency as a responsibility to be of its agenda is inherited, and should make it easier to Russia, which may this sum- of minister of EU affairs That need not doom left largely in the hands of the its approach to the agenda is achieve its aim of champi- mer save it from an EU and specifically for the presiden-Cyprus’s presidency from the civil service. to be an honest broker. oning solidarity. It claims to International Monetary cy, is a mark of an adminis-outset. Other presidencies The government says the be a small country with few Fund bail-out. The success of tration that is being stretchedhave also had ill-starred Cypriot presidency (or An honest broker irons in the fire. the presidency may depend by its responsibility to thestarts. Within days of assum- Cyprus presidency, as it in- For a country of its size and But the one big iron that on whether the issue of EU. Unsurprisingly, then, theing the presidency in 2011, sists on calling it, in another economic structure, the role remains has caused many Turkey can be anaesthetised presidency is limiting its ownHungary was caught in a po- sign of community sensitivi- of honest broker comes nat- problems. The division of the for the duration of the presi- ambitions.litical storm about its media ties) is an opportunity – but urally. The Cypriot popula- island has retarded progress dency. Low expectations maylaw, which continued to for self-transformation and tion depends on services, in the EU’s relationship with Cyprus itself does not in- have a benefit for the presi-thunder, yet the presidency modernisation, rather than rather than on money from Turkey, complicated the EU’s tend to raise issues related to dency: it leaves room for wel-was generally praised as ef- self-projection. The govern- the EU’s Common Agricul- security ties with NATO, and Turkey. Turkey has said that come surprises. MIGRATION AND ASYLUMMoney worries and border battles Cyprus lies in a difficult neighbourhood; Syria’s and Lebanon’s ports lie half a day’s boat trip away, and Turkey, its nearest neighbour, is the main transit country for migrants seeking to reach the EU. That is fated to lose. But the defini- broker does not mean being a why Cyprus worries about migration, especially illegal migration.The euro and the Schengen area are tion of loss and victory is not neutral broker. On a visit to Malta earlier this month, Demetris Christofias, the president of Cyprus, said that the two Mediterranean islands haddaunting challenges for the Cypriots, whether Cyprus gets its way. On some of the other big “common worries and interests” over irregular immigration. “We’re Rather, says another diplo- items for the EU – including not racists but we must defend the rights of our countries,” he said.writes Andrew Gardner mat, from a previous presi- the Common Agricultural Amnesty International, an advocacy group, said this month that dency, success means proving Policy – it will not have much Cyprus detained too many asylum-seekers and other migrants, oftenThe contours of Cyprus’s The Cypriot analysis is that to other member states that it influence, but Cyprus’s envi- in poor conditions, and pointed out various deficiencies in its laws.presidency may be signifi- “90% to 95% of the presiden- has done everything it can – ronmental agenda has prior- The figures are low; but Cyprus feels vulnerable to the vagaries ofcantly adjusted just days be- cy will be economic”, which is showing that, if a deal is elu- ities that are attainable – migration flows.fore the presidency starts, why the presidency has sive, it is because of national agreements on trans-Euro- This exposure could make it difficult for Cyprus to act, or be perceived, as an honest broker in the complex negotiations currentlywhen EU leaders meet in brought more civil servants to capitals. pean networks, on monitor- under way between member states, and between member states andBrussels on 28-29 June. Brussels from the finance ing greenhouse-gas emis- the European Parliament, on the various elements of the Common The Cypriots are painfully ministry in Nicosia than from Technical issues sions, on water use, and a European Asylum System, which is supposed to be launched by theaware that the eurozone debt the foreign ministry. One of The Polish presidency in the successor to the LIFE+ envi- end of the year.crisis is in flux. Its own econ- these officials’ tasks will be to second half of 2011 did “a very ronment fund.omy – otherwise largely de- prepare meetings of finance good job of clearing technical Agreement on these issuestached from Greece – is being ministers, which the presi- issues”, he says. Denmark has would offer some consolation SCHENGENdragged down by Cypriot dency argues will be easier for been trying to push talks if its own national priority – to Another issue that will land in Cyprus’s lap is the EU’s Schengen areabanks’ exposure to Greece. Cyprus than it was for the ahead as far as possible with- revive the notion of an inte- of borderless travel. The European Parliament last week suspendedAnd the eurozone’s troubles previous three presidencies – out putting numbers on the grated EU maritime policy – co-operation on justice and home-affairs matters with Denmark, theare not contained. “Two sym- Denmark, Hungary and table. The task that faces proves too much of a chal- current holder of the rotating presidency, because of a decision by member states to change the legal basis of a proposal for revisedbols of the EU itself are under Poland – because Cyprus is a Cyprus is to harness the “very, lenge (see article overleaf). rules on Schengen, in effect excluding MEPs from decision-making.threat – the euro and the member of the eurozone. very strong need to agree” Cyprus has so far escaped MEPs’ censure, but that may change onceSchengen zone,” says a presi- The other daunting chal- positions and to communi- Syrian concerns it falls to Cypriot diplomats to represent the Council’s view in talksdency spokesman, going on lenge is negotiations on the cate well enough to ensure Syria is the likeliest external with the argue that the economic EU’s spending for 2014-20, the political ground is well source of difficulties for the The Dutch government is expected to drop its opposition to Bulgar-crisis and the accompanying the multiannual financial prepared for a deal. presidency. Cyprus’s proxim- ia’s and Romania’s membership of the Schengen area following theerosion of trust are encourag- framework. Cyprus’s own position em- ity to the Middle East will un- Dutch parliamentary election in September. That would leave Cyprusing proponents of limits on The long-term budget phasises solidarity. It is one of doubtedly make it sensitive to as the only country in the EU apart from the UK and Ireland thatborder-free travel and rein- touches on every issue. “It is a the 15 members of the developments in the region remains outside the Schengen area, because the recognised government does not control the entire territory of the island.forcing opposition to sharing litmus paper,” says a diplomat Friends of the Cohesion Poli- and, if foreign-policy initia-the burden of coping with il- from another member state, cy trying to protect the policy tives emerge during the pres-legal migration, an important and “without a good narrative from cuts by the largest con- idency, they might well relate with both the Arab world and kept its embassy in Tripoliconcern for Cyprus and other on that, they will have lost”. If tributors – an affiliation that to that region. Cyprus likes to Israel, and it has during the open. These six months mayMediterranean states. so, a small country might be demonstrates that an honest talk up its friendly relations Libyan crisis, like Hungary, test the value of those ties.
  2. 2. THE CYPRIOT PRESIDENCY OF THE EU 21 June 2012 17An island of alliances and divisions EU officials will be relieved International Crisis Group, a that the Czech scenario, of think-tank. AKEL has not yet a government collapsing chosen a candidate and is halfway through its turn at non-committal about a possi- the helm of the EU’s Council ble alliance with DIKO.The Cypriot president will not contest AKEL, who came second. In DIKO – which opposes ac- of Ministers, is unlikely to be DISY, the moderate, cen- the week that separated the commodation with the Turk- repeated. In any case, it is less tre-right opposition party, willthe next election, and it is unclear who two rounds, DIKO swung its ish Cypriot community – of a problem for a Cypriot send Nicos Anastassiades, its support behind Christofias, ended up impeding the new government to lack a parlia- leader, into the race. Pope de-his successor will be, writes Toby Vogel who won the presidency with president’s ability to strike a mentary majority than it scribes Anastassiades as “a lit- 53.4% to Kasoulides’s 46.6%. deal in the reunification talks, would be in other member tle untested”, but says that heThe last presidential election Kasoulides had cam- The episode illustrates a which he launched within a states. “Patronage and lever- has “one of the most positivein Cyprus, on 17 February paigned in favour of a United point made by James Ker- month of his victory. age is far more important approaches to the Cyprus2008, produced a surprise: Nations settlement plan in Lindsay, a research fellow at Following DIKO’s depar- than legislative work,” says problem”. “He was bravethe incumbent, the right- 2004, Papadopoulos had the European Institute of the ture from the ruling coalition Ker-Lindsay. The ability to enough to say ‘Yes’ and cam-wing nationalist Tassos Pa- been against it. The plan, London School of Economics last year, after a blast at a navy hand out jobs depends on paign for the Annan plan inpadopoulos from the Demo- named after the UN secre- and Political Science. “Even base knocked out more being in power, not on being 2004,” Pope says.cratic Party (DIKO) failed to tary-general of the time, Kofi though Cyprus has a presi- than half of the republic’s effective in power. But the shift in voters’ at-win enough votes to proceed Annan, was rejected by the dential system, politics is all power-generation capacity, tention from the island’s divi-to the second round, held one Greek Cypriots in a referen- about coalitions,” he says. “The Christofias now heads a mi- No frontrunner sion to the parlous state of itsweek later. He was beaten by dum just days before Cyprus Cypriot president has more nority government that in- What might emerge from economy has created a newIoannis Kasoulides from the joined the EU. But Ka- power than any other Euro- cludes several technocrats. February’s presidential elec- dynamic in domestic politicscentre-right Democratic Ral- soulides was fewer than pean leader, but in order to get But until his term in office tion is unclear. “The race is in Cyprus. How this mightly (DISY), with 33.5% of the 1,000 votes ahead of elected he needs to strike deals ends in February, Christofias wide open,” says Hugh Pope, play out next February willvote against Papadopoulos’s Demetris Christofias, the with other parties.” and his government are se- a researcher on Cyprus and become clearer during the31.8%. candidate of the Communist Christofias’s alliance with cure. Turkey in Istanbul with the next six months.Back fromthe depths CYPRUS:In 2007, the Portuguesepresidency of the Council of A Dynamic International Business CYPRUS INVEST WITH CONFIDENCEMinisters spearheaded an‘integrated maritime policy’ and Financial Centre at thethat contained a great manypromises. The packed actionplan promised to establish a Crossroads of Three Continentsnetwork of “motorways ofthe sea” throughout Europe,eliminate illegal fishing, andmitigate the effects of cli- “We are very happy to have selectedmate change on coasts. Cyprus as a base and aspire to maintain, Five years later, and thereis no integrated maritime lead and expand our operationsstrategy. “There was a lot of from the island. Cyprus’ accessiondiscussion...but since thenwe have not heard much to European Union has enhanced theabout it,” said Eleni Mari- country’s credit standing, transferringanou, secretary-general ofthe Conference of Peripher- the image of a low tax jurisdiction toal Maritime Regions. a serious regional trading and service Cyprus, as a maritimeisland state, says reviving the hub. We also believe that the Europolicy is one of the main Zone entry upgrades the country’sgoals of its period at the headof the EU. In October, an in- standing within the European Union.”formal ministerial confer-ence will be held in Mehran Eftekar, DirectorLimassol with the aim of Nest Investments Holdingsproducing a ‘Limassol decla-ration’ that sets out the pri-orities for action. Cyprus is an attractive investment destination and a reputable international business Earlier this month, and financial centre that provides a gateway to Europe, the Middle East and NorthEfthemios Flourentzou, Africa. Cyprus provides a thriving market oriented economic system combined with lowCyprus’s minister for com- cost and flexibility features along with:munications and works,said the declaration wouldmark “a new drive for the Lowest corporate tax regime in the EU of 10%further development and A centre for Banking Excellence and an Alternative Funds jurisdictionimplementation of this in- Effective and transparent tax system that is fully EU, OECD, FATF and FSF compliantnovative, cross-cutting Access to EU as a member state since 2004 and a member of the European Monetarypolicy”. Union since 2008 An extensive network of Double Tax Treaties with 43 countriesProgress reportThe European Commission Relatively lower operating costs with high quality end-to-end business servicesis expected to present a Highly qualified and well-trained professionals who provide expertise on all aspects ofprogress report on the inte- If you are looking for banking, legal, accounting and business servicesgrated maritime policy at a new business and Advanced transport and telecommunications infrastructure with state-of-the-art high-speedthe October conference, internet and mobile telecommunications, two International airports and deep-sea portswhich will be attended by investment gateway, takeMaria Damanaki, the Euro- the time and consider Cyprus offers ease of doing business in a professional environment and thepean commissioner for fish-eries and maritime affairs, Cyprus. Combining a surroundings of a sophisticated culture and advanced quality of life. More than justand José Manuel Barroso, a holiday destination, Cyprus provides the ideal environment to set up your businessthe president of the Com- rewarding standard of operations effectively and efficiently.mission. living in tune with nature The declaration will notcontain  plans, dates or dead- and Cypriot hospitality, Cyprus has more than 30 years experiencelines. But it will indicate pol- Cyprus is a dynamic place as an International Business and Financial Centreicy areas that need to bestrengthened and ways in to live and work!which maritime policies canbe better linked. P.O.Box 27032 Lefkosia 1641, Cyprus The Cypriot government Tel. + 357 22 441133 Fax + 357 22 441134 The Ministry of Commerce, Industry and Tourismhopes that this push for an Tel. + 357 22 867100, Fax + 357 22 375120integrated policy will last, than its predecessor. Dave Keating
  3. 3. 18 21 June 2012 THE CYPRIOT PRESIDENCY OF THE EUCyprus’s movers and shakers DEMETRIS CHRISTOFIAS President Demetris Christofias, the president of the Republic of Cyprus, has always stood out among European leaders. He is the only Communist in a group dominated by the centre-right; he is the only president in the EU to head his country’s government; and he is one of just two presidents to hold real executive power (the other is the president of France). But, last month, Christofias announced that he would not seek re-election next February, when his current five-year term ends. The political career of the 66-year-old appears to be over, and he will leave the public stage a much-diminished figure. The Progressive Party for the Working People (AKEL), of which Christofias has been a member since the age of 18, has yet to choose a successor. When Christofias was elected president early in 2008, hopes were high that he might be the man to bring about the reunification of the island and reconciliation between its Greek and Turkish communities. Not since Turkey’s invasion and occupation of around one-third of the island in 1974 – in response to a coup attempt hatched by the military junta that then ruled Athens, and aimed at uniting Cyprus with Greece – had the conditions appeared so conducive to a settlement. Barely one month after his election, Christofias launched settlement talks with Mehmet Ali Talat, the centre-left leader of the Turkish-Cypriot community. But four years of negotiations have failed to break the deadlock, leaving Christofias, who had made achieving a settlement the prime objective of his presidency, with very little to show for his period in office. Talat was voted out as leader of the Turkish Cypriots in 2010, to be replaced by Dervis Eroglu, a far less conciliatory ¸ ˇ figure from the centre-right. Christofias’s coalition with the centre-right Democratic Party (DIKO), which rejects accom- modation with the Turkish Cypriots, was a further complication. A deadly explosion at an ammunition dump last summer – for which the government was held responsible – prompted the DIKO to drop out of the coalition, forcing Christofias to form a largely technocratic government that lacks a strong majority in parliament. The dire state of Cyprus’s economy, with its massive exposure to Greek debt, has now replaced the division of the island as the dominant political issue. Christofias’s main legacy might well be that Greek Cypriot politics has taken a step towards normality, and away from a transfixing obsession with the problem of Turkey’s occupation. Toby VogelERATO KOZAKOU-MARCOULLIS VASSOS SHIARLYForeign minister Finance ministerGiven the vagaries of ministerial appointments in The man who will occupy arguably the hottestCyprus – horse-trading can sometimes hamper seat during the Cyprus presidency is a respectedthe island’s international agenda – many in banker rather than a politician. Appointed financeCyprus were reassured when Erato Kozakou- minister just three months ago, Vassos Shiarly isMarcoullis, an experienced career diplomat, was the third person to hold the post in just over fourput in charge of the foreign ministry in August years, following his predecessor’s resignation after2011. Kozakou-Marcoullis, 63, had been minister six months, for health reasons.of communications and works since March 2010, Christofias has not been the ideal boss forhaving served as foreign minister for seven finance ministers; he has habit of publicly dis-months under Tassos Papadopoulos, Christofias’s predecessor as president. agreeing with or even disowning measures to Kozakou-Marcoullis has a reputation for hard work and is very ready to give face-to-face reduce the budget deficit.interviews to explain the complexities of the divided island – the primary task of any Cypriot Shiarly, 64, will have to draw on all his experience to negotiate the challenges of the nextforeign minister. She is also proud of her heritage and traditions, on one occasion donning six months. First there is overseeing the negotiations on the 2014-20 multiannual financialnational dress to meet former US president Bill Clinton in Washington, DC. framework. Then – unless Cyprus finds a bilateral lender (a €4 billion loan by Russia is being After gaining two law degrees in Athens, in 1979 Kozakou-Marcoullis completed a PhD in so- talked about) – it is likely that he will be chairing meetings of finance ministers while theciology and political science at the University of Helsinki. When her husband took a job in Eurogroup of eurozone finance ministers considers a request from Cyprus for an internationalmedical research in New York, she became part of the permanent mission of Cyprus to the bail-out.United Nations from 1980 to 1988. Shiarly is widely regarded as having the tools to succeed: a hard worker who achieves his From 1996 to 1998, she served as ambassador to Sweden, with responsibility for the other aims quietly and with determination, someone who considers his words carefully. After 18 yearsNordic countries and the three Baltic states. She spent the next five years as ambassador to in accounting in the United Kingdom, he left a senior position with Coopers & Lybrand to returnthe United States, and was also Cyprus’s link to to the World Bank, the International Monetary to Cyprus in 1985, where he joined the Bank of Cyprus, rising to group chief general manager inFund, the International Civil Aviation Organization and the Organization of American States. 2010.Later, while serving as a director at the foreign ministry in Nicosia, she was ambassador to He has already set an example when it comes to cutting costs – after waiving his minister’sLebanon and Jordan. salary, Shiarly travelled economy class on a recent trip to Malta with Christofias. The As well as representing Cyprus at international bodies, Kozakou-Marcoullis has crucial question is whether he will be allowed to deliver the budget cuts that have beenpublished academic studies, and lectured in universities and to think-tanks worldwide. promised. Charles Charalambous Charles CharalambousELENI MAVROU first female interior minister was the latest She was not, however, an overnight success.Interior minister milestone in a lengthy political career that Mavrou, 51, has been politically active since her includes five years as the first female mayor of student days, when she studied for a degree inEleni Mavrou is an exception in Cypriot politics. the capital, Nicosia. politics and international relations at the Uni-She is well-grounded in the local left-wing When she began her term as mayor in 2006, versity of London. Already a member of thetradition, which at national level tends to Mavrou emphasised that while tackling the central committee of the Progressive Party offavour male politicians with largely predictable major challenges – modernising infrastructure, Working People (AKEL), with responsibility forprofiles and performances to match. But she reviving the city’s historic centre, restructuring local government, she served two terms as aalso fits easily into the familiar European leftist council services, cutting bureaucracy, getting Nicosia municipal councillor in 1986-96.mould: a successful female politician who is access to European funding – she would aim to In 2001, she was elected as an MP for because she could have a direct impact onarticulate in more than one language and encourage greater participation by citizens in Nicosia, and from 2003 also served as an people’s lives. It will be interesting to see howregarded as accessible, hard-working and social and cultural affairs. In particular, she observer at the European Parliament. But after she applies her experience to her wide-rangingdown-to-earth. thought her success would encourage more being re-elected as an MP she stood for mayor duties as interior minister. Her appointment in March as the country’s women to become involved in politics. of Nicosia, regarding it as a bigger challenge Charles Charalambous
  4. 4. THE CYPRIOT PRESIDENCY OF THE EU 21 June 2012 19ANDREAS MAVROYIANNIS KORNELIOS KORNELIOUDeputy minister for European affairs Permanent representative to the EUWhen the preparations for the EU presidency Cyprus’s preparations for its presidency of thebecame mired in controversy and accusations of Council of Ministers began badly. The head of thenepotism in October 2011, the man chosen by EU secretariat in Nicosia, Andreas Moleskis,Christofias to get things back on track seemed resigned in mid-2011 amid complaints about nepo-ideal for the job. tism in recruitment practices. There was a three- At that point, career diplomat Mavroyiannis, 55, had spent three years in Brussels as Cyprus’s month hiatus before a successor was appointed,ambassador and permanent representative to the European Union, and so was very familiar Andreas Mavroyiannis, who was Cyprus’s perma-with the European approach to consensus-building and problem-solving, and in particular with nent representative to the EU. In turn, that left athe challenges associated with the presidency of the Council of Ministers. significant vacancy in Brussels, which was filled by In contrast to the bombast, short-termism and opportunism that often characterise the appointment of Kornelios Korneliou, who took over in October.domestic politics in Cyprus, the presidency will require political vision and leadership on a The 48-year-old Korneliou has sufficient experience to steady the boat. He was Cyprus’swider scale, something that Mavroyiannis is well aware of. It will also demand coherence and deputy ambassador to the EU between 2000 and 2007 – and has spent years in some of theconsistency in acting on behalf of the Council with other institutions. Another cultural most senior positions in Cypriot diplomacy, including ambassadorships in Paris (from where hechallenge – in political terms – will be to deal with the massive organisational demands in a was re-assigned to his current post) and Vienna, a position that also involved representingtimely and effective way. Mavroyiannis appears to have the skills and experience. After a brief Cyprus’s interests to the Organisation for Security and Co-operation in Europe and the UN’sacademic career in law – he obtained his postgraduate qualification and doctorate in France – organisations. He was also, in 2008-10, the chief of staff of the then foreign minister Markoshe joined the Cypriot diplomatic service in 1987. Since then, he has served as ambassador to Kyprianou, who had previously served as Cyprus’s first European commissioner.Ireland (1997-99), France (1999-2002) and the UN (2003-8), and in various other foreign min- Korneliou is said to be good with staff, an asset that is particularly important since his team hasistry posts. Drawing on his time as an expert on EU affairs at the Civil Service College of Lon- been almost quadrupled for the duration of the presidency. Another challenge will be managingdon (1994), the soft-spoken Mavroyiannis has been putting senior civil servants through a relations with other member states, but he can already boast familiarity with Germany. He wascrash-course in EU affairs. His task was made harder by the reshuffling of three of the 11 minis- for five years a political-science student in Munich (where he wrote a thesis on the impact of EUterial posts in March, but despite such setbacks, he is satisfied that his team is more confident membership on Greece) and spent five of his early years in diplomacy in Berlin.and prepared for the task in hand than last October. Andrew Gardner Charles CharalambousNEOKLIS SYLIKIOTIS WHO CHAIRS WHICH COUNCIL IMPORTANT DATESCommerce, industry and tourism minister General affairs: Andreas Mavroyiannis 5-6 July: European Commission visits Cyprus Economic and financial affairs: Vassos Shiarly 7-8 July: Informal meeting of environment Justice and home affairs: Eleni Mavrou (home affairs), ministersAfter it was confirmed early this year that Cyprus Loucas Louca (justice and 7-8 September: Informal meeting of foreignwas sitting on substantial offshore reserves of natu- public order) ministersral gas, few were surprised when Neoklis Sylikiotis Employment and social affairs: Sotiroula Charalambous 14-15 September: Informal meeting of Health: Stavros Malas finance ministerswas moved from the interior ministry to manage a Science and research: Stavros Malas 18-19 October: European Council meets,process that will play a crucial role in determining Agriculture and fisheries: Sofoclis Aletraris BrusselsCyprus’s economic future. Environment: Sofoclis Aletraris 26 November-7 December: UN summit on Education, culture and sport: Giorgos Demosthenous climate change, Doha, Qatar Seen as a safe pair of hands by Christofias, Transport, telecommunications: Efthymios Flourentzou 13-14 December: European Council meets,Sylikiotis has been a committed member of the Energy: Neoklis Sylikiotis Brusselsruling AKEL party since his student days in the mid- Competitiveness, internal market: Neoklis Sylikiotis A draft calendar has been posted on the temporary website:, holding a range of party positions. The minister is acknowledged, even by his political The presidency website,, is to goopponents, as someone who gets the job done. He has a reputation for working hard – some live this week.jokingly say that he never sleeps – and for being strong-willed and, occasionally, “a bit intense”. Sylikiotis, 53, is one of only two ministers to survive from the first cabinet appointed byChristofias in February 2008, having served as interior minister for ten months in the previouscoalition government. During his time in charge of the interior portfolio, Sylikiotis backed a rangeof policies that tackled overly-bureaucratic government processes, including a radical reform oflocal government and legislation to untangle the town-planning process. He also earned therespect of his European peers for work on the Common European Asylum System and migrationpolicy along the EU’s Mediterranean borders. Sylikiotis’s commitment to the plight of asylum-seekers is rooted in his own past. He has talked openly about the xenophobia he encountered asa mechanical engineering student in Germany. In 2007, having resigned from the cabinet whenAKEL left the government coalition, he attended a demonstration in support of asylum-seekers –this at a time when Cypriots very rarely took the streets. Charles CharalambousSOTIROULA CHARALAMBOUSLabour and social insurance ministerSometimes, the measure of a governmentminister’s success is an absence of newspaperheadlines. That was the case until recently forSotiroula Charalambous, but with the Cypriot econ-omy suffering, it is likely to change. A political sciences graduate of the Sofia Academyof Social Science and Social Administration, aformer official for the PEO, a trades union federa-tion linked to the left-wing ruling party, and an MPsince 2001, Charalambous’s approach to carrying out her duties as labour minister has held noideological surprises in terms of dealing with the social partners. When Christofias appointed her to his cabinet in February 2008, the national budget was stillin surplus and the effects of the global crisis had not yet reached Cyprus, so labour relationswere peaceful. Today, the picture is very different. Against a background of a budget deficit anda growing public debt that has been condemned to ‘junk’ status by credit-rating agencies,unemployment has passed the 10% mark and is on an upward trend. It is the worst jobless ratein decades, especially in the construction, trade and manufacturing sectors, with more than aquarter of all under-25s out of work. Charalambous, 49, has a reputation for keeping on top of her policy issues, holding her own innegotiations, and not shying away from a fight with the opposition. Now she is facing theprospect of a hard sell to her traditional constituency, in terms of the structural economicchanges likely to be set as conditions of a possible bail-out. Charles Charalambous
  5. 5. 20 21 June 2012 THE CYPRIOT PRESIDENCY OF THE EUOn the edge of a bail-out GOOD NEIGHBOURS Demetris Christofias and Benjamin Netanyahu. REUTERS ON BORROWED TIME Cyprus Popular (Laiki) Bank. REUTERS With friends like these... count on Israel,” he says. Closer ties with Israel may benefit “Turkey-Israel is a much most notably Nicolas Cyprus in the short-term, but it could bigger story than anything to do with Cyprus.”Cyprus will almost certainly need Sarkozy, the then president eventually find itself isolated in the Should there be a recon-international financial assistance, of France, to raise its corpo- region, writes Toby Vogel ciliation between Ankara ration tax rate, also one of and Tel Aviv, Cyprus wouldbut that may not come from the the EU’s lowest, when it re- again find itself isolatedeurozone, writes Ian Wishart quested a bail-out. Ireland Over the past few years, agreements on defence in the eastern Mediter- succeeded in preventing any the strategic environment co-operation, on the ex- ranean.Cyprus’s banking sector has a loan to the Eurogroup of change, but the issue did not in the eastern Mediter- change of intelligence, andtaken a massive hit because eurozone finance ministers, help in its negotiations to get ranean has changed radi- on search and rescue mis- Frustrating talksof its exposure to Greece. an EU official said on Tues- a better deal, particularly in cally. Israel’s raid in May sions. The one development that One senior EU official, re- day. the interest rate it paid on 2010 on a Turkish vessel However, the new would dramatically alterviewing Cyprus’s economic Cyprus last year avoided a the bail-out loans. seeking to deliver aid to Israel-Cyprus alliance has this, of course, is the reuni-situation, said this week that eurozone bail-out by negoti- On the other hand, the Gaza strip provoked a its limits, and the realign- fication of the divided is-it had “heavily depleted ac- ating a loan of €2.5bn from Cyprus’s government will be fall-out between the two ment may turn out to be land and the withdrawal ofcess” to financial markets. Russia and may do so again. wary of looking too deeply countries, the region’s clos- short-lived. “Let’s not fool the Turkish troops thatCypriot banks suffered “in- “We are optimistic we will reliant on funding from Rus- est allies. The discovery ourselves: Israel is not have been occupying one-ordinately” when the private get the financing we need to sia just as it takes over the late in 2011 of gas reserves going to defend anyone third of its territory sincesector agreed to take hair- recapitalise the banks, presidency of the Council of off Cyprus’s coast – adja- but itself,” says Ioannis 1974. But after four yearscuts as part of Greece’s bail- whether that will be through Ministers. cent to Israel’s massive Kasoulides, a centre-right of fruitless talks, without, with huge Greek debts a bilateral agreement, or Cyprus’s influence in shap- Leviathan field – by Noble MEP who was Cyprus’s United Nations facilita-written off. through the mechanism, the ing the response to the euro- Energy, an American firm foreign minister from tion, prospects for a settle- It means that Cyprus EFSF,” Vassos Shiarly, zone’s sovereign debt and part-owned by Israeli in- 1997-2003. Nevertheless, ment have receded. “Imight be obliged to become Cyprus’s finance minister, banking crisis will be limited. vestors, generated excite- Kasoulides, from the op- don’t believe now what Ithe fifth eurozone country to said on Tuesday. Most policy is being shaped ment among the Greek position Democratic Rally used to believe six monthscall upon the European Fi- in national capitals, between Cypriots; and displeasure (DISY), says the Cypriot ago,” says Kasoulides,nancial Stability Facility Corporation tax the leaders of the eurozone’s in Turkey and among the government has every “that these talks will go(EFSF), the currency bloc’s Cyprus sees advantages in largest economies, France, Turkish Cypriots, who say right to exploit its hydro- anywhere.” Technical talksrescue fund. However, it getting the money from out- Germany, Italy and Spain, that the island’s energy carbon resources. “I don’t will continue, but that ismight yet go down a differ- side the EU because it would and by the team working for wealth does not belong just think mankind can sit on not the level at which a so-ent route from Greece, Ire- not have to submit to the aus- Herman Van Rompuy, the to the internationally- trillions of tons of natural lution will, Portugal and Spain, terity and structural reform president of the European recognised Republic of gas and wait for the Cypri- In the meantime,and instead take a bilateral conditions that the eurozone Council. Cyprus but to all inhabi- ots to solve their prob- Cyprus’s exposure to Greekloan from a country outside places on bail-outs. Such However, as the first coun- tants of the island. lems,” he says. debt has deepened tradi-the EU. conditions might well bring try to take over the presiden- In February, Benjamin Hugh Pope, a Cyprus tionally close ties with Rus- Cyprus faces a deadline of into the spotlight its corpo- cy while itself experiencing Netanyahu became the and Turkey analyst with sia. Last year, Cyprus se-30 June to recapitalise its ration tax rate, which at 10% the full force of the eurozone first Israeli prime minister the International Crisis cured a €2.5bn loan fromsecond biggest bank, Cyprus is the lowest in the EU. storm, it will add a unique to visit Cyprus, a 20- Group, a think-tank, is Russia at below-marketPopular, to the tune of Last year, Ireland was put perspective – as long as it can minute flight from Tel also sceptical about the rates (see left), and might in€1.8bn. But it has not yet under pressure by the lead- deal with problems in its own Aviv. At the same time, durability of the new future prefer Russian aid tosubmitted an application for ers of some other EU states, backyard first. Israel and Cyprus signed alliance. “Cyprus can’t a eurozone bail-out.Cyprus’s chance to win over the doubtersThe small size and major political cerns of doubters, among cal momentum for deals is a For the presidency of a and Democrats. them Graham Watson, a task that requires touring small country to notch up in- For Cyprus to achieve itsproblems of Cyprus are creating low British Liberal MEP. Speak- national capitals, not just dividual successes, says a broader goal – to ensure that ing on Monday (18 June) visiting Brussels. That is a diplomat from a previous solidarity is a major elementexpectations, writes Andrew Gardner about the possibility of a deal challenge amplified by the presidency, it must get into in the long-term budget – on the long-term budget, he small size of Cyprus’s gov- the triangle between the will require a shift in politi-In the hope of achieving skill and care needed to han- wondered “how you’re going ernment: it has just 11 min- European Parliament, the cal debate. There is now lesswhat at best is likely to be a dle gritty issues, and to achieve that under a pres- isters. Council of Ministers, and talk of austerity and more ofmodest presidency, Cyprus whether it will do as much as idency led by Cyprus with an Still, the ministers will be Herman Van Rompuy, the growth, but the debate hashas mobilised itself, de- a small presidency can to end-of-term, enfeebled gov- relatively comfortable with president of the European yet to embrace the argumentcamping a sizeable part of its fashion deals. ernment living on a lifeline their portfolios and on the in- Council. And Van Rompuy is of the Friends of the Cohe-administration to Brussels. There are reasons for anx- from Moscow, unable to deal ternational stage. A large seen as essential: a small sion Policy – that solidarityIt is doing several of the iety. The Cypriot banking with the problems they have number have technocratic presidency “can’t live without can be seen as a stimulus forthings that a presidency vet- sector is in crisis. Moving a on the island”. His conclu- and international back- him”. But the Belgian Chris- the European economy.eran suggests are essential: large part of the government sion: “It seems to us [Liber- grounds (in diplomacy and tian Democrat is not a natu- Winning more attention forto focus on a few priorities, administration to Brussels is als] unlikely to be able to run finance, for example). Be- ral soulmate for Demetris that position would be anwhile making sure that a gamble. And Cyprus has a decisive presidency of the cause the Greek Cypriots had Christofias, the Cypriot pres- achievement.bread-and-butter issues presidential elections next European Union.” no university until 1989, they ident, who is a Communist. For Cyprus itself, themove forward. year. This is not the best time tend to have studied abroad, It may also prove a handi- greatest success might sim- On the eve of Cyprus’s – politically or administra- A need for commitment in countries ranging from cap that the ruling party – ply be to change the narra-presidency, the questions tively – to have a twin focus, If they are to dispel such Bulgaria to the UK. The for- the Communists – is not tive about Cyprus, to ensurethat linger are whether it will on both domestic and EU af- scepticism, Cyprus’s politi- eign minister, Erato Kozak- a member of the largest that the next time that ithave the capacity to deal fairs. cians will need to show com- ou-Marcoullis, even knows left-wing group in the holds the presidency, expec-with the unexpected, the Those are among the con- mitment. To generate politi- some Finnish. Parliament, the Socialists tations are not so low.