Cyprus will today host the 5th South EU Summit, bringing together the governments of France, Spain, Italy, Portugal, Greece, Cyprus and Malta – jointly representing close to 40% of total EU population and GDP, along with half of its coastline. Since its launch in Athens over two years ago, the South EU Summit has evolved into a perennial gathering amongst Southern European leaders – leveraging on similarities across member states within the scope of economic and geopolitical challenges, along with policy objectives, to establish a united direction amongst the Southern EU region. In doing so, these summits aim to be both a catalyst and a role model, for similar dialogue and reform, for the entire EU, while illustrating the function of the region in upholding the core democratic values of the European project.
During an exclusive interview, Cypriot President, Nicos Anastasiades, shed light on the unique challenges and opportunities facing Cyprus, and what these mean for the EU writ large.
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Cyprus: A Stellar Performer
Cyprus has undergone a profound economic transformation since the peak of the financial crisis, in early 2013. Under the leadership of President Anastasiades, who was re-elected for a second term, in 2018, the country was able to make a swift exit from its €10 billion bailout programme – which included the highly controversial bail-in of bank deposits – returning to investment grade in 2018, and being poised as one of the fastest growing eurozone members.
“During the past few years, we have succeeded in turning an economy in distress, into a story of strong economic recovery, that gained international praise,” said Anastasiades, highlighting the role of an ambitious reform programme, the careful management of state finances, coupled with the enhancement of Cyprus’ tax and legal framework, in spurring increased investment flows into the island-nation.
The Cypriot economy’s appeal for international investment has been supported by large-scale infrastructure projects, more tourists, and the growth of strategic sectors, such as energy, shipping, and the funds industry.
“It is evident that our efforts have borne fruit” commented Anastasiades”, acknowledging, however, that “the challenge now is to keep up the momentum, and ensure that Cyprus remains on a path of sustainable growth.” While staying the course is a priority, Anastasiades explained that the deepening of investment “in education, research and development, entrepreneurship, and the empowerment of our youth”, are critical elements moving forward.
Cyprus has also become a significant player in the region’s and the EU’s energy prospects. Cross-border pipelines, like the $7 billion EastMed pipeline project – which would enable the transfer of Israeli and Cypriot gas to the EU, via Greece and Italy – would not only contribute to diversify Europe’s energy supply, they would also have a far-reaching geopolitical impact.
“We are actively working on the EastMed Pipeline Project”, stated Anastasiades, stressing the relevance of the Eastern Mediterranean, “as a region that can become a reliable energy supplier, thus contributing substantially to the EU’s energy security”.
Cyprus also recently signed an Intergovernmental Agreement with Egypt, for the construction of an underwater gas pipeline for the transfer of Cypriot natural gas to Egypt’s LNG facilities, and its subsequent re-export. The agreement, said Anastasiades “is an equally important development, since the natural gas, through the Idku LNG plant, will be exported to the EU.”
Cyprus’ emergence as a decisive regional energy player was first realised in 2011, when Noble Energy made a significant natural gas discovery. However, reserves were not considered sufficient to be commercially viable. Italy’s ENI announced the finding of the Calypso gas field in Cyprus’ Exclusive Economic Zone (EEZ), in February of 2018, with an estimated 6-8 Tcf (trillion cubic feet) of natural gas. And attention is now set on the exploratory drilling in Block 10 by ExxonMobil – along with it partner, Qatar Petroleum – which is set for completion within the coming weeks. Should a sizable discovery of natural gas be made, Cyprus could, at long last, make the exploitation of its offshore gas resources commercially viable
However, Turkish-Cypriots seek to stop current exploration out of fears that the profit-sharing disputes between the communities, will further destabilise the region. A little over one third of the Cypriot territory has been occupied by Turkey, since 1974, with Nicosia remaining the world’s last divided capital. Last year, Cyprus accused the Turkish military of blocking a drill ship hired by Italian company Eni, from exploring for natural gas. Turkey responded that certain areas of Cyprus’ offshore EEZ are under the jurisdiction of Turkish Cypriots and Turkey.
Nevertheless, the Cypriot government has stated that all energy wealth will be shared amongst all Cypriots, once a solution is reached. “It has to be clear that the Government of the Republic of Cyprus is acting in the interest of all its citizens, Greek-Cypriots as well as Turkish-Cypriots, who will benefit accordingly”, stated the Cypriot President, adding, that “Turkey, almost on a daily basis, continues to issue warnings and threats if we insist on proceeding with our energy programme.”
It is widely accepted that Cyprus cannot fully reach its potential – politically or economically -without a reunification, with estimates suggesting that the reunification of the island could up to triple the island economy’s growth rate. “I cannot stress enough, the significance, and the consequent multiple benefits, that the solution of the long-lasting Cyprus problem, and the normalisation of our relations with Turkey, would bring about,” said Anastasiades.
And yet, creating the necessary conditions for talks is tricky. Anastasiades hopes that the new UN Special Envoy can make some headway, and allow the Secretary-General to resume negotiations. The aim is to get all parties to agree on the “Terms of Reference” so negotiations can, finally, continue. However, says Anastasiades, this must be done through the adherence to the fundamental principles of the European acquis – thereby freeing Cyprus of any third country dependencies – entailing both military troops and guarantees.
A united Cyprus would be of benefit to all Cypriots, but it would also amplify its current role in providing energy security to Europe, improve overall security architecture of the EU, and be a model for conflict resolution via UN mediation.
“All these developments highlight our firm conviction, that the wealth of the region can bring the countries of the region together, creating common interests, and contributing to peace and stability,” said Anastasiades.
The Future of Europe
While always a model for European cooperation, the timing of this South EU Summit bears more relevance than ever before. 2019 marks the 10th anniversary since the implementation of the Treaty of Lisbon, while also being a decisive year for the future of the Union, with the upcoming European Parliamentary elections having been referred to, as the most important elections in the history of the EU.
“I am certain that we all agree that this year, 2019, will be a defining year for Europe” commented Anastasiades, alluding to the new cycle of institutional changes that will soon commence with the return to the ballot box. “Europe is facing all sorts of challenges – social, economic, environmental, political threats and security issues, challenges that touch upon the life of our citizens.”
It will be the first EU-wide vote since the United Kingdom’s decision to exit the bloc, with voters having to decide on opposing visions for the future of Europe, regarding pressing issues such as eurozone reform and migration. Southern European leaders will, undoubtedly, today propose a consensus for the future direction of the European project.
The good news is that according to recent surveys, most citizens (62 per cent) regard being in the EU as a good thing, with 68 per cent believing their nation has actively benefited from the arrangement. However, many EU citizens also look at Brussels with suspicion, and turn more attention to national political personalities.
And yet, while the Cypriot President is well aware of what these elections mean for the European project, he remains optimistic that Southern European leaders will be up to the task of perusing the necessary reforms, to both “put the European project back on track” and “adapt it to modernity”.
“We, the Mediterranean states, have common concerns, and we are determined to pursue fair and well-designed policies, for the benefit of Europe and our citizens. Change and progress are both possible if there is vision, determination, leadership, cooperation, and coordination. I have no doubt that all these elements exist, and we can take the Union one step further, for the benefit mostly of the Europeans. That is the reason and purpose of our gathering.”
Brexit negotiations are also an issue of great importance this year, as the prospect of a “no-deal” Brexit looms large. At the 2017 South EU Summit in Madrid, a joint statement expressed regret at the UK’s decision to leave. As the exit date for Britain approaches, the Southern EU countries will likely coalesce around specific policy measures, even as individual states, like Spain and Cyprus, have already struck bilateral accords, concerning their territory and citizens affected by the UK’s departure from the bloc.
Regarding Brexit, Cypriot Foreign Minister, Nikos Christodoulides, stressed European unity on the issue, saying “We are following developments in Britain very closely. The issue is continuously being discussed at the European level, and it is very important that the EU27 have a common approach on it.”
The EU Migration Challenge
Since an onset in 2015, the European Union has been dealing with what is seen as the most severe migration crisis since World War II, and has struggled to grapple with the growing number of migrants pouring across its borders from both the Middle East and Northern Africa. Developing a strategic response to a growing number of refugees, has prompted a rift between several EU member states, with some nations welcoming millions, and others refusing them outright.
Establishing a consensus for the management of migratory inflows, currently constitutes one of the biggest challenges for the EU writ large – while also representing the main concern of European voters in 22 of the 27 EU countries, that will head to the polls in the upcoming European Parliament election.
With most migrants arriving via the Mediterranean Sea, under EU law, asylum seekers must lodge their applications in the first EU country they enter – placing excessive pressures on Southern EU Member States, particularly Italy, Greece, and Spain. Cyprus, in particular, ranked first in asylum claims per capita, with close to 6,000 requests in 2018 alone, representing a 55 per cent increase from the previous year. Hence, establishing a united front on the reform of EU migration and asylum policy, has been on the agenda of every single summit between Southern European leaders, since the onset of the gatherings in Athens, 2016.
In line with previous joint statements, Cypriot Foreign Minister Christodoulides, stressed how migration has a bigger impact on the Southern Member States, and expressed hope that the upcoming summit would outline concrete policies to address the issue.
On this, Anastasiades minces no words: “Front line states cannot be left alone anymore, to bear the responsibility of hosting, and providing adequate reception conditions, to the immense flows of asylum seekers, while other Member States provide only financial and technical assistance. Nor can the EU be dependent on the goodwill of certain third countries, to cooperate, and to carry out their obligations.”
Upholding the EU’s Leadership in the Fight Against Climate Change
As signatories to the Paris Agreement, the EU set out ambitious goals in November, 2018, that would result in the Union becoming the world’s first carbon-neutral economy by 2050, effectively leading the way to carbon neutrality. With targets set for the submission of a strategy to the UN by 2020, Member States need to agree on a course of action to reach this long-term objective. Achieving this, however, will be no easy task, given the need to both comply with climate targets, and keep domestic economies competitive, as well as heeding the social implications derived from the energy transition.
While alluding to the conclusions derived from the latest IPCC Report and the COP-24 deliberations, Anastasiades made his position clear: “climate change has emerged as the new major threat, especially for the Middle East and Northern Africa”, reinforcing “the need to take immediate action at a national, regional, and an international level.”
Anastasiades recognises that Cyprus, along with all the other Mediterranean and Northern African states, are particularly vulnerable to the effects of global climate change, resulting in social upheaval, conflict, and mass migration – which could ultimately cascade into international instability.
However, Anastasiades sees an opportunity to leverage on Cyprus’ ideal location – at the crossroads of three continents – and warm relation with countries in the region, noting that the island-nation would make an ideal host for international organisations to set up shop, and promote a “dialogue forum”, where national and regional stakeholders could discuss and implement science-based solutions to climate-change related problems. It would also be the ideal location to track changing weather patterns, and make predictions required to assess the extent of rapidly changing conditions.
“Cyprus could promote coordination and cooperation, between the countries of the region, so that an Action Plan is developed,” he added.
To that end, efforts are already underway to establish a new regional Centre of Excellence on Climate Change in Cyprus, to be a knowledge hub for environmental and climate change research, and addressing the related social challenges that result in Cyprus, the Mediterranean, and the Middle East.